Auto Market Off to a Cautious Start in 2015

The auto market in India got off to a cautious start in the first month of 2015. It was a mixed bag with a few players maintaining the growth momentum, while some others posting tepid sales numbers. While the manufacturers, by and large, reported good sales volumes, the uncertainty continues to grip the automotive retail market.

The rollback of excise duty sops and hike in vehicle prices from January 2015 also had an immediate impact on the sales. A large number of the consumers had preponed their purchases to December to avail the benefit of lower prices and the year-end stock clearance discounts & freebies. Domestic sales volumes across various categories of vehicles grew by paltry 1.7% to 1,650,382 units in January 2015 from 1,623,429 units a year ago.

Passenger Vehicles witness modest rise

Benefitting from declining fuel prices and softening interest rates, domestic sales of passenger vehicles, including cars, UVs and vans, recorded a modest growth of 3.2% y-o-y to 230,619 units in January 2015, withdrawal of softer excise duty regime notwithstanding. Strong demand for petrol models, as a result of narrowing difference between diesel and petrol and new models also helped boost demand. Passenger vehicle exports were also on course, clocking 11.8% rise y-o-y to 45,287 units during the month.

The car market leader, Maruti Suzuki India (MSI) witnessed a 9.3% increase in its domestic sales that stood at 105,559 units in January 2015 vis-a-vis 96,569 units in January last year. While the company’s models - Alto and Wagon R – in mini segment saw a 7.3% decline to 35,750 units (January 2014: 38,565), its bread-and-butter compact segment comprising Swift, Celerio, Ritz and DZire registered a 7.5% growth in domestic sales to  45,881 units in January 2015 (January 2014: 42,669). UV segment saw the highest year-on-year increase of 35.0% in domestic sales at 6,432 units during the month. In the van segment - Omni and Eeco combined - sold 10,113 units in domestic market, higher by 8.2%, compared with 9,345 units in January 2014. Maruti Suzuki’s exports were on high-growth trajectory, surging by a whopping 88.9% y-o-y to 11,047 units in January 2015.

During 10 months of FY’15, i.e.  Apr’14-Jan’15, Maruti Suzuki India has sold a total of 959,091 units in domestic market, which translates into a 12.6% growth y-o-y. 

Hyundai Motor India Ltd (HMIL) – the second largest car maker in India - registered domestic sales of 34,780 units in January 2015, which represented a modest growth of 4.1% over the sales tally of 33,405 units a year ago. HMIL’s exports at 10,003 units were down 16.7% y-o-y.

Commenting on HMIL’s January 2015 sales, Rakesh Srivastava, Senior Vice-President (Sales and Marketing), said, “The growth came in on the momentum built by products like the new Elite i20, Grand and Eon, while facing the stiff challenges of increasing cost of ownership on account of increase in excise duties. For sustained growth, the need of the hour is reduction in interest rates and rationalisation of taxes to increase the inflow of the first-time buyers."

Mahindra & Mahindra (M&M) reported total domestic sales of 18,804 passenger vehicles in January 2015, down 5.0% year-on-year. 

Pravin Shah, Chief Executive, Automotive Division, M&M, said, “The first month of 2015 has not been encouraging, as the effect of withdrawal of excise duty subsidy is clearly evident. Unfortunately, the segmented recovery, which we were witnessing over the last couple of months has been impacted with the excise duty change. We do hope that the upcoming Union Budget has some positive news for the auto sector.”  

Riding on continuing robust demand for Honda City and Amaze, Honda Cars India Ltd (HCIL) saw its domestic sales surge by a healthy 16.7% y-o-y to 18,331 units in January 2015. The model-wise domestic sales break-up during the month is as follows: City -7671 units, Amaze - 6,709 units, Mobilio - 2,942 units, Brio – 951 units, and CR-V 58 units.

HCIL also exported a total volume of 1,369 units in January 2015. The company’s overall sales in January 2015 are its highest ever monthly sales including exports.

The Japanese carmaker has registered an overall growth of 47% during April 2014-January 2015 with 149,464 units of domestic sales, as against 101,370 units during the corresponding period of FY 2013-14. 

“January 2015 has been an extremely good month for HCIL. We registered our highest monthly domestic sales of this fiscal contributed by strong sales momentum for all the models. We are confident of a strong performance through the year,” Jnaneswar Sen, Sr VP–Mktg & Sales, HCIL, said.

Another Japanese auto major, Toyota Kirloskar Motor (TKM) clocked 15.9% upswing in its sales in the Indian market, which aggregated 12,650 units in January 2015, as compared to 10,910 units in January 2014. 

N Raja, Director and Sr VP-Sales & Mktg, TKM, commented: “The growth of 16 per cent is also credited to the launch of the new Innova and new Fortuner 4x4 AT, in early January.” However, he cautioned, “The effect of the increased prices on account of excise duty hike is still impacting the market. We hope the government will reconsider the excise duty concessions in the upcoming Union Budget.”

Tata Motors’ Passenger Vehicle Business Unit recorded domestic sales of 12,994 units in January 2015, up 19.8% over 10,846 units sold in January 2014.

The trend of growth in passenger vehicles continued, with the strong Zest sales and the good response to Bolt. While the sales of Tata passenger cars in January 2015 added up to 11,637 units, higher by 37.5%, the UV sales in domestic market continued to slide, falling sharply by 44.0% y-o-y to 1,410 units in January 2015. 

General Motors India’s sales in the domestic market witnessing downtrend for a long time, slumped 20.6% to 4,410 units in January 2015 (January 2014: 5,557 units).

Ford India, despite putting up a somewhat better show, posted a marginal 0.9% decline in domestic sales at 6,647 units in January 2015, as against 6,706 units a year earlier.

2-Wheelers hit speed-breaker

The two-wheeler segment saw its growth momentum slowing down during the first month of 2015. Domestic sales of two-wheelers at 1,327,957 units grew by a measly 1.1%.

Pune-based Bajaj Auto (BAL) registered total two-wheeler sales (including exports) of 246,955 units during January 2015 as against 281,390 units sold in January 2014, marking a drop of 12.2% y-o-y. Domestic sales of Bajaj two-wheelers remained in deceleration mode, falling by 23.2% y-o-y to 128,937 units during the month, while two-wheeler exports at 118,018 units were up 4.0% y-o-y.

Hero MotoCorp saw its domestic sales slip by 1.4% y-o-y to 546,169 two-wheelers in January 2015. The company’s exports, on the other hand, recorded a massive 78.1% upsurge y-o-y to 12,813 units during the month. Total sales (domestic + exports) at 558,982 units were flat, de-growing a little by 0.4% (January 2014: 561,253 units). The company closed the year 2014 with sales of 6,645,787 units, its highest-ever sales achieved for any calendar year.

Driven by its scooter models, TVS Motor Company clocked total domestic sales of 162,284 two-wheelers in January 2015, growing modestly by 3.9% y-o-y. Two-wheeler exports of TVS Motor were in negative terrain, falling by 17.9% y-o-y to 19,232 units during the month.

India Yamaha Motors came up with impressive performance with domestic sales volume of 39,313 units that represents a decent 23.6% uptick y-o-y.

Meanwhile, Suzuki Motorcycle India (SMIL) reported sales of 30,444 units in domestic market during January 2015 – up 15.2% over 26,427 units sold a year ago.

Staying in top gear, Royal Enfield, recorded domestic sales of 28,157 units in January 2015, growing by a handsome 42.1% y-o-y. The company exported 770 motorcycles, clocking a growth of 81.6% y-o-y. 

M&HCV sales post gains, while LCVs stuck in reverse gear 

The New Year began on a somewhat bright note for the CVs. M&HCVs gave something to cheer about, posting a healthy 36.8% growth y-o-y in domestic sales that aggregated 21,363 units in Jan’15. However, the LCVs continued to reel under slowdown, degrowing 9.1% y-o-y.

In terms of company-specific sales, Tata Motors’ overall domestic sales remained flat. The company sold 25,627 CVs in January 2015 as against 25,811 CVs in January last year. Tata M&HCVs continued to perform well for the company, notching up 38.0% growth. The company sold 11,273 units of M&HCVs as compared to 8,166 units a year ago. The domestic sales of LCVs declined by 18.7% y-o-y to 14,354 units during the month.

Ashok Leyland clocked healthy sales numbers in January 2015 with domestic sales growing by 33.8% to 9,511 units compared with 7,107 units a year ago.

VE Commercial Vehicles saw its sales in the Indian market rise 25.1% to 2,905 units in January 2015 (January 2014: 2,322 units).

With retail sales not picking up in line with expectations, all eyes are set on the  Union Budget 2015, which will hopefully come up with measures to boost the economy,  giving fillip to the auto market in the process.




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