Sombre Mood Persists in Auto Market

Poor run of auto market in India continued as all segments, except for two-wheelers, posted negative growth during the month of November 2013. Persistent challenging economic environment, inflation, high interest rates and volatile fuel prices leading to downbeat sentiment played the spoilsport again.

There was no respite for passenger vehicles, commercial vehicles and 3-wheelers, which remained in negative terrain, giving a feeling of sickness and gloom.

Beating the slowdown blues, two-wheelers sustained the momentum on the back of good monsoon and resultant rural demand, posting 5.55% growth in domestic sales at 1,240,732 units. The exports of two-wheelers were also in fast lane, growing by 16.7% y-o-y to 177,695 units in November 2013.

Passenger vehicle sales in domestic market reading 201,520 units stayed in low gear, declining by 10.2% y-o-y. Exports standing at 44,960 units too were in negative terrain, witnessing 13.6% drop y-o-y during the month of November 2013.

Commercial vehicles, barometer of the pace of economic activities, continued their downhill drive with domestic sales falling by 28.8% to 43,730 units in November 2013 from 61,403 units during the same month previous year. Hit hard by the economic slowdown, M&HCVs witnessed a sharp 34.0% y-o-y fall in domestic sales at 11,523 units, while LCVs were down 26.7% to 32,207 units in November 2013 from the year-ago domestic sales figure of 43,962.

Total domestic sales across various vehicle categories managed a paltry 0.9% uptick y-o-y to 1,526,438 units, while the exports adding up to 253,376 units grew by 6.2% y-o-y thanks to the handsome contribution by the two-wheelers.

Maruti Suzuki India (MSI), India’s largest car manufacturer reported a 10.7% decline in November 2013. The carmaker sold a total of 92,140 units in November 2013 in comparison to the total sales tally of 103,200 units n the same month of 2012.

The domestic sales of MSI aggregated 85,510 units, down 5.9% from 90,882 units sold in November 2012. While the mini car segment of the carmaker, which includes car models such as the M800, the Alto, A-Star and WagonR expanded by 3.7% y-o-y to register sales of 38040 units in local market, the domestic sales of the company’s compact car segment, comprising of the Swift, Ritz and Estilo witnessed a 24.0% fall in the month of November 2013. The compact sedan segment comprising of the DZire compact sedan saw an increase in sales by 13.2%. The exports of the carmaker also suffered and declined by 46.2% y-o-y to 6,630 units during the month of November 2013.

Hyundai Motor India Ltd (HMIL), the largest car exporter and the second largest car manufacturer in India posted a 10.9% drop in its total sales to 49,681 units in November 2013 from 55,762 units a year ago. The domestic sales of the Korean carmaker dipped by 3.6% from 34,751 units in November 2012 to 33,501 units in November 2013. The carmaker’s exports fell 23.0% y-o-y to 16,180 units in November 2013.

Commenting on the sales, Rakesh Srivastava, Sr Vice President, Sales and Marketing, HMIL said, “At Hyundai the strong focus on Channel efficiency & the addition of the successful new model Grand with sales of 11,007 units along with the strong product portfolio has increased the cumulative market share of Hyundai cars to an all-time high in a declining industry. After the festival season market has been sluggish due to unfavourable macro-economic factors and the low market sentiment, resulting in lower customer enquiries.”

Riding on the stupendous response to Honda Amaze, Honda Cars India Ltd (HCIL) clocked 9,332 units of domestic sales in the month of November 2013 as against 3,711 units sold during the corresponding month previous year, registering a whopping 151.5% growth of. The company also exported 806 units of its cars during the month.

Model wise domestic sales break-up of HCIL for November 2013 stood as follows: Brio – 1,712 units; Amaze – 7,598 units; and CRV – 22 units. 

Jnaneswar Sen, Sr Vice President – Marketing & Sales, HCIL, commented, “Led by strong demand for Honda Amaze, HCIL has experienced robust sales month after month since April 2013. During November 2013, our sales grew up by 151%. This month was also important as we unveiled the all new 4th Generation Honda City in India and we are confident that we will enter a new era of Honda’s dominance in premium cars with City’s launch scheduled in January 2014”. 

Bitten by the slowdown bug, the Indian auto major, Mahindra and Mahindra (M&M) saw its domestic sales fall across all product categories in its portfolio. Passenger Vehicle segment (which comprises of Utility Vehicles and Verito) recorded a massive 31.8% de-growth with domestic sales tally reading as 16,771 units in November 2013 as against 24,604 units a year back. The LCV and Van category witnessed domestic sales of 13,186 units, while the corresponding sales figure a year back stood at 14,353 units. 

The story was no different for the other home-grown player, namely, Tata Motors, which continued to be weighed down by the challenging economic conditions.

Passenger Vehicle Business Unit of Tata Motors remained in negative terrain with domestic sales plunging by 43.2% y-o-y to 10,153 units from the sales tally of 17,890 units.

Domestic sales of Tata commercial vehicles were no better either, as the company posted a negative growth of 39.2% y-o-y in domestic sales at 27,039 units.

Rival Ashok Leyland was also stuck on a sticky wicket. The company registered a 30.3% y-o-y contraction in domestic sales at 4,721 units.

General Motors India sold 6,214 vehicles in the month of November 2013 against 7,230 vehicles sold in November 2012 - down 14.1%.   The sales tally included 2,151 units of Beat, 1,347 units of Tavera and 1,206 units of Chevrolet Enjoy.

“As expected, the market has gone down drastically after a small spike during the festive season. Overall, the market continues to remain sluggish due to unfavorable economic conditions and we do not expect any improvement in the coming months. Unless the government offers a stimulus package to the struggling automobile industry, the market is unlikely to see any upturn before a new government assumes office after elections next year,” said, P Balendran, Vice President, GM India.

The Japanese player, Toyota Kirloskar Motor (TKM) recorded a 1.4% drop in sales in the Indian Market, which stood at 10,208 units in November 2013 vis-à-vis 10,352 units a year ago.

Sizeable sales contribution by its latest offering EcoSport helped Ford India notch up 33.1% growth in domestic sales at 7,909 units during the month of November 2013. The company’s exports were down marginally by 1.7% y-o-y to 4,141 units during the month.

However, two-wheelers sustained their growth momentum and provided comfort in an otherwise gloomy scenario.

Market leader Hero MotoCorp saw its domestic sales of two-wheelers grow by 6,8% to 5,20,437 units in November 2013 from 487,505 units in the same month previous year. 

Bajaj Auto posted a negative growth of 28.4% in domestic sales of its two-wheelers in November 2013, which stood at 162,616 units as compared to 227,186 units in the year-ago month. However, the company’s exports were on track rising by 16.6% y-o-y to 116,087 units during the month.

Honda Motorcycle and Scooter India (HMSI) was, once again, the pick of two-wheeler players, with its domestic sales of two-wheelers soaring by impressive 46.3% y-o-y to 306,477 units in November 2013.

India Yamaha's domestic sales increased by 6.5% y-o-y to 39,777 units during the month. 

Total two-wheeler sales of Chennai-based TVS Motor in the Indian market, however, dipped 9.9% y-o-y to 135,218 units in November 2013. 

The year 2013 is turning to be the worst year for the Indian auto market in terms of growth numbers, two-wheelers being the only saving grace. The industry, trade and experts alike do not see the sentiment and the market to improve immediately and are pinning their hopes on the formation of a strong Government at the Centre in May/June 2014. 





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