Auto Market Continues to Drive in Slow Lane

The forecast of a weak monsoon and the sluggish rural economy, depressing the rural market sentiment, took a toll on vehicle sales numbers during the month of June 2015. While passenger vehicles slipped back into the negative terrain, two-wheelers recovered to post a modest growth. Total sales, comprising all vehicle categories, at 1,620,673 units in the Indian market, clocked a measly 2.6% uptick year-on-year.

Passenger vehicle sales sputter 

Passenger vehicle sales flattered to deceive. After two months of modest growth in the current fiscal, the passenger vehicle market faltered again to record a negative growth of 0.5% in domestic sales that stood at 217,642 units in June 2015 vis-à-vis 218,828 units a year ago.

Car market leader Maruti Suzuki India Ltd (MSIL) came up with a relatively unimpressive performance, selling 102,626 units in the domestic market during June 2015, which represented a marginal 1.6% increase over 100,964 units sold during the same month last year. The company’s exports at 12,130 units also recorded a modest 2.7% uptick y-o-y during the month. Alto and WagonR constituting the mini segment witnessed a sharp 27.9% y-o-y decline in domestic sales to 34,336 units. However, the domestic sales of company’s compact segment comprising Swift, Celrio, Ritz and Dzire soared 24.4% to 45,701 units in June 2015 from 36,741 units a year earlier.

The second largest car player in the Indian market by volumes, Hyundai Motor India Ltd (HMIL) registered domestic sales of 36,300 units (33,514 units) in June 2015 - up 8.3%, thanks to the significant contribution of i10 and i20 to the sales tally. The company’s exports, however, stayed in reverse gear, falling by 7.3% to 15,762 units in June’15 from 17,004 units in June’14. The cumulative sales of the company stood at 52,062 units in June 2015, rising by 3.1% y-o-y. 

Commenting on the June sales, Rakesh Srivastava, Sr VP - Sales and Marketing, HMIL said, "In a market bearing low traction, Hyundai’s volume grew by 8.3% and with the upcoming launch of Global SUV Creta, we are confident of sustained growth.”

Building on its growth momentum, Honda Cars India Ltd (HCIL) sold 18,380 units in the local market during the month of June 2015, growing by 12.7% over the domestic sales figure of 16,316 units a year ago. The model wise domestic sales break-up of HCIL during the month read as follows: City - 7,187 units, Amaze 6,834 units, Jazz - 2,336 units, Brio – 923 units, Mobilio - 1,043 units, and CR-V – 57 units. Jnaneswar Sen, Sr VP - Marketing & Sales, HCIL, said, “Currently, we are excited about the launch of new Jazz, which, we believe, would help us make further inroads in the Indian market.”

Another Japanese auto major, Toyota Kirloskar Motor (TKM) sold 10,464 units in the Indian market in June 2015 as compared to 12,010 units in June last year - down 12.9%. The company attributed the lower sales volume to limited production during the month on account of planned annual plant shutdown during the first six days of June for regular maintenance.

Total sales of TKM, including export of 1,917 units of Etios series, aggregated 12,387 units in June 2015, which translated into 7.5% drop y-o-y. 

The Year-To-Date (YTD) domestic sales of TKM have grown by 19% y-o-y in the first half of calendar year 2015, on the back of launch of new variants of Innova, Fortuner, Camry and Camry Hybrid. Etios series and Corolla have also registered growth in the first half of the year.

Tata Motors recorded a year-on-year growth of 30.4% in domestic sales of passenger vehicles, which added up to 10,231 units in June 2015. The growth was largely driven by the company’s new offerings in car segment - Zest and Bolt and GenX Nano. The domestic sales of Tata passenger cars in June 2015 were higher by 43.5% at 8,516 units, compared to 5,933 units in June 2014, while the UV sales in domestic market declined by 10.3% y-o-y to 1,715 units during the month.   

Another home-grown player, viz. Mahindra & Mahindra (M&M) remained in negative territory, registering a 14.8% de-growth in domestic sales of passenger vehicles, including cars, UVs and vans, which stood at 15,880 units in June 2015 as against 18,635 units in June last year.

General Motors India (GMI) saw yet another month of negative growth in domestic sales that plunged by 41.1% to 3,042 units in June 2015 (June 2014: 5,165 units).

Ditto for another American player - Ford India that witnessed a steep 37.6% fall in domestic sales to 4,527 units in June 2015 from 7,258 units a year ago. 

Nissan Motor India was stuck in the reverse gear. The company’s domestic sales were down 23.0% y-o-y to 3,357 units during the month.

Riding on the  new Vento, Volkswagen India sold 4,039 units in June 2015, an increase of 31.2% as compared to 3,079 units in June last year. 

Robust sales growth of scooters boost two-wheeler numbers

Motorcycle sales, which constitute 70% of the two-wheeler market in India, continue to reel under the slowdown in rural markets. A healthy growth of 14.2% in scooter sales at 370,710 units, took the two-wheeler domestic sales tally to 1,307,710 units in June 2015, which helped two-wheelers post a 3.6% growth over domestic sales volume of 1,262,883 in June 2014.

The largest two-wheeler player, Hero MotoCorp Ltd (HMCL) witnessed a 2.9% decrease in domestic sales at 515,279 units in June 2015 as against 530,560 units a year earlier. The company, on the other hand, clocked a whopping 145.5% surge in exports at 27,083 units in June 2015 versus 11,034 units in June 2014. HMIL’s release said that the company reduced inventories in Q1, as there had been inventory build-up due to the sluggish market. The company further reported that its retails were currently better than dispatches. Going forward, the company has lined up a slew of launches across segment in scooters and motorcycles.

Honda Motorcycle & Scooter India (HMSI), staying on course, clocked domestic sales of 331,859 units in June 2015, which were higher by 7.3% y-o-y. 

Arresting the slide, Bajaj Auto registered a modest growth of 4.7% in domestic sales of two-wheelers at 154,596 units in June 2015, vis-a-vis 147,690 units a year ago. The company’s export of two-wheelers also registered a growth of 16.1% y-o-y to 132,986 units during the month.

TVS Motor Company sold 177,769 two-wheelers in the Indian market during the month of June 2015, up 4.7% (June 2014: 169,805). The company’s two-wheeler exports at 33,233 units were also on course, witnessing a growth of 24.6% y-o-y.

India Yamaha Motor’s two-wheeler sales at 51,432 units in domestic market were up 26.5% y-o-y in June 2015. 

Suzuki Motorcycle India Pvt Ltd (SMIPL), with domestic sales volume of 28,467 two-wheelers in June 2015, posted a 22.4% growth (June 2014: 23,249). Atul Gupta, Executive VP, SMIPL, said: “Several factors have come together to propel us onto a consistent growth path. This is because of Suzuki’s marketing efforts and also the perceived upswing in consumer mood. The aggressive marketing initiatives for the Gixxer have generated a lot of excitement and interest in Suzuki’s flagship product.” 

Mahindra Two-Wheelers continued to slide, its domestic sales at 8,697 units in June 2015 plummeting by 39.6%, as compared to 14,389 units a year ago.

M&HCV sales stay on course, while LCVs (SCVs in particular) are stuck in rut

M&HCVs posted a growth of 20.7% y-o-y in domestic sales at 22,184 units during the month of June 2015, thanks largely to the pent-up demand arising from the fleet renewal by the operators after over two years of acute slowdown, which had kept the new purchases by the operators on hold. The growth has also been aided by the gradual opening up of stalled mining activity and boost to the infrastructure development by the current Government at the Centre. Mirroring the challenging environment that still continues to dog the economy, LCVs remained in a deceleration mode and dipped 10.5% y-o-y to 29,262 units during the month. 

Tata Motors’ domestic sales of CVs at 25,592 units in June 2015 were down 4.9% (June 2014: 26,898). Tata M&HCVs maintained the growth momentum, with domestic sales rising by 19% y-o-y to 11,450 units in June 2015. Domestic sales of Tata LCVs were stuck in negative terrain, slipping by 18.2% year-on-year to 14,142 units during the month.

Ashok Leyland remained on high-growth trajectory with a healthy growth of 38.9% in domestic sales that added up to 9,179 units in June 2015, as against 6,609 units a year ago.

VE Commercial Vehicles (VECV) saw a marginal growth of 1.8% in domestic sales to 3,537 units in June 2015 from 3,474 units in the year-ago month.

With domestic sales figure of 654 units, Mahindra & Mahindra (M&M) reported 49.0% y-o-y growth in M&HCV segment during June 2015, albeit on a small base. M&M LCV sales in domestic market were down 18.3% y-o-y to 10,485 units.

Good monsoon rainfall during June and July, defying somewhat scary picture painted by the Met Department, augurs well for the auto market. This is likely to perk up the sluggish rural market, boosting the overall economic environment and the sales numbers for the auto market.

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