INDIA SALES ANALYSIS: JANUARY 2016

Carmakers feel the pressure of slowing sales in January 

After consistently posting growth for 14 months, January 2016 sales numbers for passenger vehicle manufacturers in India indicate muted sales for most of the large players.

Maruti Suzuki India, the largest carmaker in the country, reported flat growth of 0.8% in January 2016 with total sales of 106,383 units. While the bread-and-butter entry level hatchback combine of the Alto and Wagon R sold 34,206 units, down 4.3% year on year, its five compact cars (Swift, Ritz, Celerio, Baleno and Dzire) sold 44,575 units, down 2.8% YoY. The premium Ciaz too has been feeling the pressure of slowing sales – it sold 5,431 units, down 9.6% YoY.

What saved the blushes for Maruti Suzuki in Janaury is its UV and van sales. The Gypsy, Ertiga, Grand Vitara and S-Cross together sold 8,114 units, up 26.2% and the Omni-Eeco combined sold 10,512 units, up 3.9% Yoy.

On the export front too, Maruti is seeing some pressure of slowing sales. Last month, the carmaker shipped 7,223 units, down 34.6% YoY. 

On the cumulative sales front, the carmaker has crossed the 1-million units sales mark with April 2015-January 2016 sales totaling 1,078,341 to record 12.4% YoY growth. The company is well set to cross 2014-15’s total domestic sales of 1,170,702 units. It needs to sell 92,361 units to cross this figure, which it should in February itself.

Hyundai Motor India, the country’s No 2 passenger car manufacturer and the largest passenger car exporter, registered domestic sales of 38,016 units in January 2016, a growth of 9.3% year on year. However, on the export front, its despatches of 6,214 units were 37.9 percent down on January 2015’s 10,003 units exported.

Commenting on the January sales, Rakesh Srivastava, senior vice-president (Sales and Marketing), Hyundai Motor India, said: “Hyundai has started the year on a positive note registering domestic sales of 38,016 units with a growth of 9.3% over last year. The growth momentum of last year has continued, built by the strong performance of products like the Grand i10, Creta and i20 Elite/Active.”

Mahindra & Mahindra (M&M) said that its Passenger Vehicles segment (which includes UVs, cars and vans) sold 22,088 units in January 2016 as against 19,573 units during January 2015, a growth of 12.85 percent.

Speaking on the sales performance for January 2016, Pravin Shah, president and chief executive (Automotive), M&M, said, “We are happy to have achieved this growth during January 2016 which has been possible due to the demand for our products especially the newly launched KUV100 and TUV300. The Auto Expo is expected to provide a strong fillip for the auto industry which would be beneficial for all OEMs. We are also hopeful that the upcoming Union Budget will have significant sops for the automotive industry, enabling it to post sustainable growth in times to come.”

Honda Cars India has reported monthly domestic sales of 17,135 units in January 2016 against 18,331 units in January 2015, down 6.5 percent year on year. The popular City was the best-seller with 8,037 units, followed by the Jazz (4,709), Amaze (3,471), Mobilio (441), Brio (396) and the CR-V (81).

For the April 2015-January 2016 period, the Japanese carmaker has recorded cumulative sales of 161,609 units, a growth of 8 percent (April 2014-January 2015: 149,464). The company also exported a total of 400 units during January 2016.  

Tata Motors’ passenger vehicles sales were at 10,728 units a decline of 18% compared to 13,047 a year earlier. The wholesales of passenger cars in January 2016 were lower by 20% at 9,350 units compared to 11,637 units in January 2015 and the UV sales declined by 2% at 1,378 units in January 2016.  Cumulative sales of all passenger vehicles in the domestic market for the fiscal are 107,118 units, higher by 2% over last January 2015.

Volkswagen India recorded a growth of 8 percent in monthly sales for January 2016, selling 4018 units in January 2016 as compared to 3,734 units sold in January 2015.

Michael Mayer, director, Volkswagen Passenger Cars, Volkswagen Group Sales India, said, “Starting this year on a positive note, we are very happy to announce an increase in monthly sales for Volkswagen Passenger Cars for January 2016. We attribute this success to a consistent overall performance of our highly popular carlines, the Polo, Vento and Jetta, supported by an encouraging response to the recently launched 21^st Century Beetle. With a pipeline filled with highly anticipated, performance-driven products, we look forward to a successful year ahead.”

Toyota Kirloskar Motor (TKM) reported sales of 8,511 units in the domestic market in January 2016. This number is 32.72 percent down on the 12,650 units sold in January 2015. On the export front too, January sales were little to cheer about for the Japanese carmaker – it shipped 745 units of the units of the Etios series, compared to 1,714 units exported in January 2015.

Commenting on the monthly sales, N Raja, director and senior vice-president, Sales & Marketing, Toyota Kirloskar Motor, said, “Our monthly sales have been affected. Part of it is a repercussion of the recent ban on registration of diesel vehicles with engine capacity of more than 2000cc in Delhi and NCR. We are looking forward to the Auto Expo where we will exhibit our prowess in the MPV segment and hybrid technology.”

At the Auto Expo, TKM will have an entire zone dedicated to hybrid and alternative fuel technology where the automaker will display Toyota’s cutting- edge innovations in both these fields.

Interestingly, the Camry Hybrid, the first locally manufactured hybrid in India has sold over 1,500 units in the Indian market since its launch in August 2013.

Renault India registered domestic sales of 8,031 units in January 2016 as against 3,203 units in January 2015, a growth of 151 percent. This sharp increase is thanks to the game-changing Kwid which was recently voted as Autocar India’s Car of the Year 2016.

Orders for the Kwid have crossed the 90,000 unit mark and Renault India says it has ramped up the production capacity at its Chennai plant to meet the growing demand for the product. The carmaker is also expanding its product, network and customer engagement. It has substantially increased its sales and service network reach in India, from 14 sales and service facilities in mid-2011 to 205 currently, and is targeting to reach 240 facilities by the end of this year. 

Two-wheeler OEMs in the grip of a slowdown

Hero MotoCorp, which saw another month of over 550,000 unit sales, is among those feeling the pressure of slowing commuter bike sales. The country’s largest two-wheeler manufacturer sold 563,348 units in January 2016 to register flat growth of 0.78 percent YoY (January 2015: 558,982). The company sales its scooter range, led by the new Maestro Edge and Duet, has helped it expand its market share.

Honda Motorcycle & Scooter India has reported total sales of 378,719 units in January 2016 (January 2015: 378,719), which indicates flat growth of 0.32 percent. The company says its domestic scooter sales stood at 235,960 units (3% up). For the April 2015 to January 2016 period, HMSI has sold a total of 3,732,736 units with scooter sales accounting for 2,315,430 units (13% up).

Bajaj Auto, which revealed its all-new 150cc V commuter motorcycle on February 1, sold a total of 252,988 motorcycles (including exports) to post 2% growth (January 2015: 246,955). For the April 2015-January 2016 period, cumulative sales of 2,858,721 units point to flat growth of 0.26 percent (April 2014-January 2015: 2,866,070).

Continuing to grow rapidly in terms of month-on-month sales, Royal Enfield registered its highest-ever monthly sales in January 2016. The Chennai-based motorcycle manufacturer recorded total domestic sales of 47,140 units in January 2016, marking a substantial jump of 67.42 percent on the 28,157 units sold in January 2015. The company had registered its previous best in October 2015, a festive month last year, when it had sold 44,138 units in the domestic territories.

A closer look at Royal Enfield’s calendar year 2015 sales highlights that it breached the 40,000 unit sales mark for the first time in August 2015, and since then it has continued to score over the 40k mark every subsequent month.

January 2016 marks the sixth month in a row that Royal Enfield has notched sales of more than 40,000 units per month. Collating all monthly sales data as reported by the company for the ongoing financial year, we glean that it has averaged monthly sales of 40,116 units during April 2015-January 2016.

According to Royal Enfield, it exported a total of 570 motorcycles in January 2016 as against 770 units exported in January 2015. The month saw a decline in exports by 26 percent YoY. However, on the cumulative front, the company registered total exports of 8,855 units during January 2015-January 2016, thereby marking a growth of 27 percent YoY.

TVS Motor Company recorded 7.7 percent growth in its domestic two-wheeler sales with figures of 172,162 units (January 2015: 159,804). Scooter sales grew by 14.1 percent, increasing from 54,830 units in January 2015 to 62,552 units in January 2016. Motorcycles recorded 19.9 percent growth with sales increasing from 69,564 units in January 2015 to 83,374 units in January 2016.

Mahindra Two Wheelers sold a total of 10,317 units during January 2016, recording 11.66 percent growth (January 2015: 9,240).

CV sales maintain growth curve in January 2016

In what is good news for commercial vehicle players in India, sales in the first month of 2016 are positive across both medium and heavy commercial vehicles (M&HCVs) and LCVs. The LCV segment is seeing growth after nearly two years of declining sales.

Most of the manufacturers who released January sales numbers have notched gains in both M&HCVs and LCVs, which augurs well for the industry for the rest of the year. While there is no significant change in micro-economic factors  that affect the overall economy, falling diesel prices and increasing manufacturing and infrastructure activities are helping fleet operators.

As per company-wise sales data, Tata Motors posted total sales of 30,670 units in January 2016, up 20% (January 2015: 25,574 units). Its M&HCV sales at 14,693 units were up 30% year on year (January 2015: 11,273). Holding onto the momentum of December 2015, Tata’s LCV sales remained positive, registering double-digit growth of 12% with sales of 15,977 units (January 2015: 14,301).

Ashok Leyland’s total sales last month were 13,886 units, 30% higher than in the corresponding month in 2015 (January 2015: 10,643). While M&HCV sales rose 40% at 11,208 units (January 2015: 8,009), LCV sales of 2,678 units saw marginal gains at 2% (January 2015: 2,634 units).

Mahindra & Mahindra’s M&HCV sales were up 47% at 611 units (January 2015: 416 units). While the below 3.5 T GVW segment grew 9%, selling 13,297 units (January 2015:12,150 units),  the above 3.5T GVW segment registered healthy 26% growth with sales of 477 units (January 2015:380 units).

VE Commercial Vehicles registered growth of 17.6% growth selling 3,415 units in the domestic market (January 2015: 2,905 units). Clearly, growing demand for the Eicher Pro Series is giving the company a fillip in its sales.