Pent-Up Demand Drives Vehicle Sales in July

Auto market that witnessed depressed sales in June due to expected fall in vehicle prices post-GST bounced back strongly in July 2017 with all segments of the market, except 3-wheelers, witnessing healthy growth. Total domestic sales, across various segments of the automotive market, including passenger vehicles, commercial vehicles and 2/3-wheelers, at 2,078,313 units in July 2017, grew by 13.3% over 1,834,302 units in July 2016. The exports were also on growth trajectory, rising by 3.9% y-o-y to 316,957 units during the month.

Passenger Vehicle sales driven by compact SUVs back on track

The passenger vehicles (PVs), riding on continuing robust demand for SUVs, posted a healthy growth of 15.1% in domestic sales that stood at 298,997 units in July 2017 vis-à-vis 259,720 units a year ago. The UV sub-segment, propelled by compact SUVs launched in the market of late, was the star performer, clocking domestic sales of 86,874 units in July 2017, which reflected a handsome 35.5% increase over 64,105 units in July last year. 

Leading the charge, Maruti Suzuki India (MSI), the largest player in the Indian car market, saw an impressive 21.9% upswing in domestic sales that added up to 153,298 units in July 2017, compared to 125,764 units in July 2016. Importantly, the company witnessed decent growth across all passenger vehicle sub-segments – cars, utility vehicles and vans. Maruti Suzuki’s quartet of Gypsy, Ertiga, S-Cross and Vitara Brezza comprised in utility vehicles crossed the 25,000-unit sales-mark in a month for the first time, posting a mammoth 48.3%  growth with  domestic sales volume of 25,781 units in July 2017 (July 2016: 17,382 units). The domestic sales of entry level duo of the Alto and Wagon R at 42,310 units, were up 20.7% y-o-y, indicating that these two popular hatchbacks are still force to reckon with. The company’s compact cars comprising the Swift, Ritz, Celerio, Ignis, Baleno and Dzire also came up with a solid performance, selling 63,116 units in the Indian market, which translated into a growth of 25.3% (July 2016: 50,362 units). 

Hyundai Motor India Ltd (HMIL), the No. 2 carmaker in India, registered domestic sales of 43,007 units in July 2017, up 4.4% (July 2016: 41,201 units). 

Commenting on the numbers, Rakesh Srivastava, Director (Sales and Marketing), said: “Hyundai with a growth of 14.5% month-on-month and 4.4% year-on-year, continued its growth momentum on the strength of strong performance by the Grand i10, Elite i20 and Creta.”

Homegrown UV major, Mahindra & Mahindra (M&M) reported domestic sales of 20,962 passenger vehicles, including cars, utility vehicles and vans, in July 2017, witnessing a decent 20.8% increase over 17,356 passenger vehicles sold by the company in the domestic market in July 2016.

Rajan Wadhera, President, Automotive Sector, M&M, commented, “We are happy with the overall performance in July 2017. The benefit of a good monsoon, the successful rollout of GST and a good run up to the festive season, starting from August, give us confidence of continuing a robust growth in Q2.” 

Another Indian player, Tata Motors witnessed a modest growth of 6.6% in domestic sales of passenger vehicles (cars, UVs and vans), which stood at 16,793 units in July 2017 (July 2016: 15,756 units). While the car sales in domestic market slipped marginally by 0.7% to 12,125 units, the domestic sales of Tata UVs saw a quantum jump of 109.9% at 2,808 units, due to strong demand for Tata HEXA.   

Toyota Kirloskar Motor (TKM), which had seen depressed sale numbers in June, bounced back with sales of 17,758 units in the domestic market during July 2017, registering a robust growth of 43.2% over 12,404 units in the same month last year, thanks to a big price cut in UV prices on implementation of GST.

“The Innova Crysta has seen impressive growth in July, with over 9,300 units sold. We are delighted that this month our MPV leader has achieved the milestone of highest-ever sales globally. The new Fortuner has also been a major contributor to overall growth with over 3,400 vehicles sold, which is the highest ever in India since the vehicle’s launch. However, the customer demand for our strong hybrid product Camry Hybrid has seen a significant fall owing to the price hike as per applicable tax under the GST framework,” N Raja, Director and Senior VP (Sales & Marketing), TKM commented.

Ford India reported a decent 19.0% uptick in domestic sales at 8,418 units in July 2017 (July 2016: 7,076) units. The company’s exports of passenger vehicles soared by hefty 65.5% y-o-y to 17,657 units during the month.

Honda Cars India Ltd (HCIL) was in fast lane too, with its domestic sales tally surging by 21.7% to 17,085 units in July 2017 vis-a-vis 14,033 units a year ago. WR-V become Honda’s best-seller in India, driving past longstanding topper, Honda City. HCIL’s modelwise sales break-up for July read as follows: WR-V - 4,894 units; City - 4,854 units; Jazz - 2,971 units; Amaze - 2,913 units; BR-V - 1,042 units; Brio – 396 units; and CR-V - 15 units.

Renault India and Nissan Motor India are running out of steam. While Renault India saw its domestic sales fall by 25.1% y-o-y to 8,964 units in July 2017, Nissan Motor India’s domestic sales were down 32.1% y-o-y to 4,360 units during the month.

Two-Wheelers stay on growth trajectory

Cheered by good monsoon rains, two-wheeler sales stayed on course. Total domestic sales of two-wheelers across companies, grew by 13.7% to 1,679,055 units in July 2017 from 1,476,332 units a year earlier. All two-wheeler majors, except for Bajaj Auto, recorded decent growth in July.

Carrying forward the momentum of its highest-ever quarterly sales in the first three months (April-June) of FY ‘18, Hero MotoCorp, the world’s largest two-wheeler manufacture for 16 consecutive years, commenced the second quarter of the fiscal with a robust six-lakh plus sales for the month of July, despite sluggish sales for the first few days of the month due to the transition to GST. 

Hero MotoCorp sold 611,307 units of two-wheelers in the Indian market during July 2017, registering a healthy growth of 17.4% over the corresponding sales volume of 520,559 two-wheelers a year ago. The company’s two-wheeler exports increased by 3.5% y-o-y to 11,962 units during the month. The July was the third consecutive month of six-lakh plus sales for the market leader in this fiscal, having clocked 624,185 units in June and 633,884 units in May.

Honda Motorcycle and Scooter India (HMSI) was also in over drive. The company saw a healthy 19.2% surge in domestic sales of its two-wheelers, which aggregated 511,960 units in July 2017 Vs 429,551 units in July 2016. HMSI’s exports also clocked a staggering 33.8% growth to 32,569 units in July from 24,333 units a year ago.

TVS Motor Company reported total two-wheeler sales of 219,396 units in the Indian market during July 2017, witnessing a 6.2% uptick, compared to 206,605 units in July last year. The company’s two-wheeler exports at 43,940 units were up 33.0% year-on-year. 

With domestic two-wheeler sales volume at 66,135 units in July 2017, India Yamaha Motor witnessed a modest growth of 1.4% y-o-y. Yamaha’s two-wheeler exports were, however, in top gear, rising by 26.0% y-o-y to 15,972 units during the month.

Royal Enfield, continuing its dream run, saw domestic sales of its motorcycles grow by 21.2% to 63,157 units in July 2017 (July 2016: 52,128 units). 

Likewise, Suzuki Motorcycle India was also on fast track, the company’s domestic sales of its two-wheelers soaring by a mammoth 78.8% y-o-y to 34,037 units in July 2017.

Among the major two-wheeler players in the Indian market, Bajaj Auto was the only company to have recorded a dip in sales. The company’s domestic sales of two-wheelers at 164,915 units in July 2017 witnessed a 5.4% decline from 174,324 units a year ago. The two-wheeler exports of Bajaj Auto were down 9.8% y-o-y to 100,267 units during the month.  

Commercial vehicles stage recovery

Recovering from the blow dealt in by the Supreme Court order on BS III vehicles and the pre-GST apprehensions, commercial vehicles were back on growth path. Total domestic sales of commercial vehicles at 59,000 units in July 2017 were up 13.8% y-o-y. While M&HCVs recovered to clock a modest growth of 6.7%, LCVs stayed on course, posting a year-on-year increase of 18.7% in domestic sales during the month. The reduction in vehicle prices in the wake of GST implementation also helped boost the sales numbers.

The leader in CV market, Tata Motors witnessed a 17.9% uptick in domestic sales of its commercial vehicles, which stood at 25,982 units in July 2017 vis-à-vis 22,033 units in the same month last year, due to ramp-up of production of BS IV compliant vehicles. 

Rival, Ashok Leyland registered a 13.5% uptick in domestic sales, which added up to 10,524 units in July 2017, as against 9,269 units a year ago.

Mahindra & Mahindra (M&M) posted a 14.1% growth in domestic commercial vehicles sales at 15,027 units in July 2017 vis-à-vis 13,168 units in July 2016.

Volvo-Eicher Commercial Vehicles (VECVs) clocked 3,714 units in domestic sales of Eicher branded CVs, posting a paltry 1.4% growth year-on-year.

While vehicle sales have been encountering bumps from time time, the mood remains upbeat. With monsoon rains shaping up true to the forecast, bringing cheers to the economy and GST taking root gradually, auto market is headed for brighter days ahead.

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