Auto Market Off to a Great Start in FY’17

The Indian auto market made a strong comeback, posting healthy sales volumes across all segments in April 2016. The double-digit growth was driven by gradually improving economic environment, benign fuel prices, softer interest rates and new launches. Total domestic sales, comprising 2-wheelers, 3-wheelers, passenger vehicles and commercial vehicles, registered an increase of 20.0% to 1,900,879 units in April 2016 from 1,583,582 units in April last year

New models fuel passenger vehicle sales

Recently launched models continued to drive passenger vehicle sales in April 2016, as the top automakers reported double digit growth during the month. The market also benefitted from the increased spendings during the month on account of wedding season. Passenger vehicle sales in domestic market grew by 11.04% to 242,060 units during April 2016 vis-à-vis 217,989 units in April last year. 

Thanks to the tremendous response to its new offerings – Baleno and Vitara Brezza and its expanding footprint in the premium car segment, Maruti Suzuki India (MSI) recorded a 16.2% rise in domestic sales that stood at 117,045 units during April 2016, as against 100,709 in April 2015. The entry level duo of the Alto and Wagon R sold 31,906 units, down 9.9% (April 2015: 35,403), while the compact car quintet of the Swift, Ritz, Dzire, Celerio and Baleno sold 45,700 units in domestic market, which reflected an 8.0% growth y-o-y. Ciaz sedan sold 5,702 units in the local market, registering a growth of 22.3% over 4,662 units in April 2015. The company’s exports at 9,469 units in April 2016 were down 14.2% y-o-y.

Hyundai Motor India Ltd (HMIL) registered domestic sales of 42,351 units in April 2016, notching up a growth of 9.7% over 38,601 units a year ago. HMIL’s exports slid 6.5% to 12,069 units in April 2016 from 12,904 units a year ago.

Commenting on the April sales, Rakesh Srivastava, Sr Vice President - Sales and Mltg, HMIL, said, “In an industry seeing challenges on rural sales and diesel vehicle sales, Hyundai continued its growth momentum with volume growth of 9.7% over last year with strong performance from the Creta, Elite i20 and Grand.” 

Mahindra & Mahindra (M&M) posted domestic sales of 22,655 passenger vehicles, including UVs, cars and vans, in April 2016 as against 19,464 passenger vehicles during April 2015, clocking 16.4% uptick.

Pravin Shah, President & Chief Executive (Automotive), M&M said: "At Mahindra we are happy to have begun the new financial year with a growth of 14 percent. We do hope that the Honorable Supreme Court, while taking a decision on diesel vehicles ban in NCR region will take cognizance of all the facts including the role that the automotive industry plays in the country's industrial growth. Going forward, we hope to maintain our growth momentum with our wide range of product portfolio as well as the new launches of variants and refreshes, as per the need of our customers.”

Another Indian auto major, viz. Tata Motors clocked a 3.4% y-o-y increase in domestic sales of its passenger vehicles, which added up to 12,230 units (including 3,022 units of Tiago) in April 2016 vis-à-vis 11,823 units a year earlier.

Riding on the strong performance of Kwid, Renault India saw another month of phenomenal growth. The carmaker registered a whopping 210.6% rise in the domestic sales to 12,426 units in April 2016 from 4,001 units in the corresponding month last year. Kwid alone contributed 9,795 units to the domestic sales.

Honda Cars India Ltd (HCIL) saw its domestic sales fall by 17.0% to 10,486 units in April 2016 from the corresponding sales tally of 12,636 units in the corresponding month last year. HCIL’s sales were led by Honda's City and Amaze sedans, which clocked sales of 5,793 units and 2,639 units, respectively. HCIL also exported 494 units during April 2016. 

Toyota Kirloskar Motor (TKM) witnessed a massive 30.8% fall in domestic sales to  8,529 units in April 2016 from12,325 units in April 2015. The company exported 982 units of the Etios series in April 2016 vis-a-vis 1,334 units in April 2015.

“We are hopeful that the Hon’ble Court will lift the ban on registration of diesel vehicles above 2,000cc in the National Capital Region (NCR), which is impacting our sales efforts, as our cars dominate the 2000cc+ diesel vehicle space. We are hopeful that with the introduction of the Innova Crysta, we will see a growth in our overall sales," N Raja, Director & Sr Vice President - Mktg & Sales, TKM said.

Likewise, another Japanese carmaker, Nissan Motor India too posted negative growth, its domestic sales at 3,028 units in April 2016 declining by 28.9% y-o-y. The company’s exports, however, managed to stay on course, crawling up by 0.8% y-o-y to 6,271 units during the month.

Ford India’s combined domestic wholesales and exports in April 2016 grew by 15.9% to 16,470 vehicles from 14,215 vehicles in the same month last year. While the domestic sales increased 32.4% y-o-y to 6,531 vehicles, the exports aggregating 9,939 vehicles in April 2016 were up 7.1% over 9,284 vehicles in April 2015 . 

“Our three-pronged brand transformation strategy based on introducing products that customers want and value, addressing the cost of ownership perception and delivering a differentiated customer experience has enabled us to deliver above industry growth rate,” said Anurag Mehrotra, ED, Marketing, Sales and Service, Ford India. 

In April, Ford also strengthened its sales and service footprint with the inauguration of new facilities in Amravati, Dhanbad, Renukoot, Faizabad, Gonda and Satna to reach 376 sales and service facilities in 209 cities across the country. 

Two-wheelers gaining traction 

Shrugging off uncertainty in rural market, two-wheelers began the FY’17 with a bang. Domestic sales of two-wheelers notched up a healthy 21.2% growth to 1,560,339 units in April 2016 vis-à-vis 1,287,056 units a year ago.

The largest two-wheeler manufacturer, Hero MotoCorp reported a 14.4% increase in domestic sales that stood at 600,525 units in April 2016, as against 525,051 units in April 2015. Total sales including domestic and exports at 612,739 units in April 2016 were higher by 14.9% y-o-y. According to the company, “In addition to maintaining its leadership in the 100cc segment, Hero has also been further consolidating its leadership in the 125cc segment, driven particularly by the best-selling motorcycle Glamour, which grew by 23% in the last financial year (FY2016).”

Honda Motorcycle and Scooter India (HMSI), the number two player in the Indian two-wheeler market, witnessed a growth of 25.8% in domestic sales, which increased from 328,994 units in April last year to 414,035 units in April 2016. Total sales of HMSI, including exports of 17,040 units, expanded by 26.5% y-o-y to 431,075 units during the month.

Bajaj Auto clocked total sales of 291,898 motorcycles (including exports) in April 2016, marking a growth of 2.1% y-o-y. The company came up with a sterling performance in domestic sales that grew by a healthy 24.8% to 200,433 units in April 2016 (April 2015: 160,554 units).

Clocking a robust 65.6% surge, India Yamaha Motor sold 63,942 units in domestic maket (including Nepal) during April 2016, as against 38,610 units sold in April last year.

Continuing its dream run, Royal Enfield registered total sales of 48,197 units in April 2016 including exports of 1,160 units. The company’s domestic sales at 47,037 units (April 2015: 33,118 units) clocked a handsome 42.0 growth.

Commercial vehicles stay in top gear

Carrying forward the growth momentum, commercial vehicles witnessed a 17.4% uptick in domestic sales that added up to 53,835 units in April 2016, as against 45,872 units in April last year. Importantly, LCVs growing by 14.0% y-o-y, continued on recovery path.

Ashok Leyland was yet again the pick of CV players in the Indian market, posting a robust 28.8% growth in domestic sales that numbered 9,514 units in April 2016 (April 2015: 7,389 units). 

Domestic CV sales of Tata Motors at 23,367 units were up 13.8% y-o-y in April 2016 (April 2015: 20,536 units), while the company’s CV exports were in negative terrain dropping by 6.0% y-o-y to 3,436 units during the month. 

Mahindra & Mahindra (M&M) sold 12,947 CVs, including SCVs, LCVs & M&HCVs, in the Indian market during April 2016, which represented a growth of 14.3% over domestic sales figure of 11,329 units a year ago. 

VE Commercial Vehicles (VECV) registered a 32.5% growth, selling 4,641 units in the domestic market (April 2015: 3,503 units).

The auto market has been able to post good sales numbers in April, despite persistent rural challenges and the continuing Supreme Court order regarding ban on registration of diesel passenger vehicles above 2000cc in Delhi NCR. With  Meteorological Department forcasting above-average monsoons this year, the uncertainty is expected to ebb off, giving boost to the vehicle sales. A number of new launches scheduled this year, especially in passenger vehicle segment will also aid in providing further fillip to the auto market.

 

 

 

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