Green Shoots of Recovery

 

Helped by a tad improvement in the sentiment arising from the formation of a stable Government at the Centre, passenger vehicle sales in the Indian market reversed its negative growth streak, rising by 2.8% to 207,953 units in May 2014 from 202,358 units a year ago.

Commercial vehicles, however, continued to head southward, registering a 15.3% year-on-year decline in domestic sales that stood at 46,986 units in May 2014, bogged down by the persistent challenging economic environment and slowdown in industrial activity. The continuing sluggish demand for commercial vehicles is reflective of the fact that the Indian economy is yet to gain traction.

Shrugging off the tardy sales performance during the last few months, 3-wheelers bounced back, clocking a 12.4% rise in domestic sales to 40,369 units in May 2014 from 35,904 units in May last year.

Two-wheelers remained in acceleration mode, growing by 16.3% y-o-y in terms of domestic sales to 1,420,830 units during the month, on the back of continuing robust demand in rural areas and Tier-II and Tier-III cities.

Substantial numbers contributed by two-wheelers aided total sale of vehicles across categories in domestic market to register a growth of 13.2% to 1,698,138 units in May 2014 over 1,499,893 units in the same month of 2013.

Car market leader, Maruti Suzuki India Ltd (MSIL) posted total sales of 100,924 units (including exports) in May 2014, reflecting a 19.2% increase year-on-year. Domestic sales of MSIL grew by 16.4% to 90,560 units from 77,821 units a year earlier. The domestic sales tally was boosted by the compact segment comprising Swift, Estilo, Ritz and Celerio that clocked a whopping 53.9% surge y-o-y to 26,394 units during the month thanks to the tremendous response to the company’s new offering – Celerio.

Hyundai Motor India Ltd (HMIL), the country’s second largest car manufacturer, clocked domestic sales of 36,205 units and exports of 15,513 units, with cumulative sales figure reading 51,718 units during the month of May 2014.  While domestic sales grew by 12.8%, the exports, on the other hand, registered a steep 37.3% decline y-o-y.

Commenting on the May sales, Rakesh Srivastava, Sr VP- Sales and Marketing, HMIL, said, “Hyundai with a volume of 36,205 units has grown by 12.8%, which is in line with this year’s objective to grow in market share and volume. The phenomenal success of Xcent, Grand and Santa Fe increased volumes creating positive momentum.” 

Driving in the fast lane, Honda Cars India Ltd (HCIL) recorded domestic sales of 13,362 units in May 2014 registering a growth of 17.8% over 11,342 units in May 2013, thanks to the stupendous success of the new Honda City and strong sales momentum for Honda Amaze. Model wise domestic sales break-up of HCIL during May 2014 read as follows: Brio -  1,333 units; Amaze -  4,752 units; City -  7,218 units; and CR-V  - 59 units.

Jnaneswar Sen, Sr Vice President – Mktg & Sales, HCIL, said, “We are thankful to our customers for the continued support we have received for the Amaze and new City. Currently, we are excited about entering into the MPV segment with the upcoming launch of our 7 seater - Honda Mobilio.” 

Ford India more than doubled its tally in May 2014, selling 12,288 vehicles in combined domestic wholesales and exports, compared with the total sales figure of 5,993 vehicles in May last year. Domestic sales of Ford India stood at 6,053 vehicles in May, up 51.2% from sales volume of 4,002 vehicles a year ago. The company exported 6,235 vehicles in May 2014, witnessing a spectacular 216.8% growth y-o-y. 

“A stable government is a positive development for overall economic and business sentiment in the country. We are hopeful that the new government will support ongoing industry-friendly initiatives like the excise duty reduction and look at further positive measures to improve consumer sentiment,” said Vinay Piparsania, Executive Director - Marketing, Sales and Service at Ford India. 

Indian arm of Toyota, viz. Toyota Kirloskar Motor (TKM) sold 11,831 units in May 2014 as compared to 10,023 units in May 2013, thereby witnessing a 18.0% growth. The company’s exports of Etios at 1,397 units were, however, down 43.6% during the month from 2,479 units a year earlier. 

N Raja, Director and Sr Vice President, Sales & Mktg, TKM said “We have resumed normalcy in production and have registered growth in May. We launched Etios Cross and the new Corolla Altis last month and have received a very good response. Starting the dispatch of new models in May, we registered sales of 555 units and 548 units of Etios Cross and Corolla Altis, respectively.” 

General Motors India sold 4,865 vehicles in May 2014 in the local market, down 42.7% (May 2013: 8,496 units). These sales included 1,716 units of the Beat, 1,076 units of Tavera and 934 units of Enjoy. 

Mahindra & Mahindra (M&M) remained  in slow lane, registering a negative growth of 18.7% in domestic sales of its passenger vehicles, which stood at 18,085 units in May 2014 vis-à-vis 22,244 units in May last year. Total sales of M&M, including UVs, 3-Ws, CVs and Vans, in domestic market aggregated 35,499 units – lower by 15.7% compared with 42,104 units a year ago.

Pravin Shah, Chief Executive, Automotive Division, M&M, said, "Auto sales continue to remain subdued for many players. Post the electoral mandate, we expect to see improved sentiment, which we hope will lead to a gradual increase in demand."

The performance of another homegrown player, namely, Tata Motors was no better. Passenger Vehicle Business Unit of Tata Motors continued to witness free fall in domestic sales that declined by16.6% y-o-y to 9,150 units in May 2014. Domestic sales of Tata commercial vehicles adding up to 25,184 units in May 2014 were also in negative terrain, plunging by 26.9% from the corresponding sales figure of 34,457 units a year ago.

In keeping with the downtrend in CV segment, Ashok Leyland registered a 12.9% fall in domestic sales from 6,462 units in May last year to 5,629 units during May 2014.

Making rapid strides, Honda Motorcycle and Scooter India (HMSI) revved up the sales charts, with a growth of 55.1% in domestic sales that aggregated 342,136 units in May 2014 as against 220,616 units a year ago. HMSI also notched up a handsome 56.8% y-o-y increase in exports to 13,403 units during the month.

Driven by new launches, the world’s largest two-wheeler manufacturer - Hero MotoCorp Ltd (HMCL) sold 602,483 two-wheelers (including exports) in May 2014 - its highest-ever despatch sales for any non-festival period. The previous highest was in the preceding month, i.e., April 2014 when the company had sold 571,054 two-wheelers. The total sales of HMCL in May 2014 represented a growth of 8.0%. Domestic sales of Hero MotoCorp at 589,360 units were up 7.6% y-o-y.

Anil Dua, Sr Vice President - Mktg & Sales, HMCL, said, “The year has started well with record-breaking sales in both April and May. The demand momentum is thanks to the regular summer surge, as also to the recent new launches from Hero. We have also undertaken several brand-building initiatives that have helped us achieve these record numbers.”

While Hero Motocorp ruled in terms of sales volume, Mahindra Two-Wheelers topped the sales charts with the highest percentage growth of 131.5%. The company’s domestic sales stood at 15,878 units in May 2014 as against 6,858 units in May 2013. 

Domestic two-wheeler sales of TVS Motor zoomed by 24.4% from 140,056 units in May 2013 to 174,219 units in May 2014. The exports of TVS two-wheelers were in overdrive as well, soaring by 39.1% to 26,828 units during the month.  

India Yamaha Motor also joined the party, registering domestic sales growth of 40.1%. The company sold 47,680 units in May 2014 against 34,021 units sold in May last year. Yamaha’s scooter Alpha that was launched at the Auto Expo earlier this year has been a major growth driver for the company. 

Suzuki Motorcycle India too posted a 7.3% increase y-o-y in domestic sales at 30,080 units in May 2014 compared to 28,021 units in May 2013.

Meanwhile, Bajaj Auto recorded lacklustre two-wheeler sales numbers in the Indian market, which contracted by 16.9% y-o-y to 176,277 units in May 2014. However, the company made up for the loss in the Indian market with impressive two-wheeler export numbers, which shot up by 47.6% to 136,743 units , constituting roughly 45.0% of the Bajaj Auto’s total two-wheeler sales.

The month of May 2014 has rekindled hopes of turnaround of auto market. The establishment of a stable government at the Centre and reduced prices as a result of lower excise duty introduced in interim Budget has brought about a revival of sorts. The below-normal monsoon rain forecast by the Met Department remains a major worry.

 

 

 

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