INDIA MARKET ANALYSIS – December 2013

Three quarters in the slow lane, no respite

While the top two carmakers saw sales rise in December 2013, thanks to time-tested models as well as new models, overall numbers were down. Two-wheeler sales, particularly scooters with 30 percent growth, were a saving grace though. Amit Panday reports.

Decembers are usually known for slack sales in general as buyers tend to delay purchases to the new year, hoping to buy the latest model. So December 2013 was no different in that respect even as it saw some OEMs offer handsome discounts to woo buyers into showrooms.  However, consumer sentiments continue to be low. The prices of fuel remain volatile with yet another fuel price hike on January 3, 2014 (petrol – Rs 81.31/litre and diesel – Rs 62.6/litre; both Mumbai) and that means buyers will delay purchase decisions. CNG is also 10 percent costlier now.

The year 2013 was easily one of the most challenging years in recent times as sales fell in 11 of 12 months (barring August  2013 when sales rose on a low base). Moreover, a bunch of OEMs (such as Mahindra & Mahindra, Hyundai Motor India, Mercedes-Benz India, Renault India, GM India and others) have increased the prices of models across their respective portfolios to counter the increasing costs of raw materials, the effect of rupee depreciation and the slowdown.

In December 2013, Maruti Suzuki India sold 86,613 units domestically, up 5.5 percent (December 2012: 82,073 units). The mini passenger vehicle segment (M800, Alto, A-star, WagonR) saved the day for the company as it registered a reasonable growth of 16.7 percent at 38,286 units sold during the month (December 2012: 32,797 units). The Alto sold 23,823 units while the Swift and Dzire sold 16,788 and 15,427 units respectively. The Omni had another great month with 5,590 units sold and secured its place in the Top 10 for the fourth consecutive time. Maruti Suzuki has six brands in the Top 10 as the Ertiga with 4,924 pipped the Innova by a handful to get to No. 9 slot. However, the SX4 saloon saw a fall of 17.6 percent as Maruti sold just 271 units in December 2013 as compared to 329 units in December 2012.

Hyundai Motor India (HMIL) sold 28,345 units during the month, up by 6.2 percent (December 2012: 26,697 units). Notably, the company has managed to sell over 40,000 units of its new Grand i10 since its launch in September 2013. With a saloon version close to launch, HMIL is keen to consolidate its sales based on this platform. The company sold 9,077 units of the Grand i10 which, along with the Eon (5,428 units) are the only two Hyundai brands in the Top 10. Rakesh Srivastava, senior VP (sales & marketing), said: “Hyundai made strong initiatives in rural and exchange sales to increase its market share to the highest level since its inception and achieved the annual business plan.”

Mahindra & Mahindra (M&M) sold a total of 16,436 units (including all utility vehicles, Verito and Verito Vibe), down 27.8 percent as against December 2012 where it sold 22,761 units. The company sold 8,465 units of the Bolero and 3,418 units of the Scorpio.

Toyota Kirloskar Motor recorded domestic sales of 10,648 units in December 2013 as compared to 12,071 units in December 2012, down by 11.79 percent. Sandeep Singh, deputy MD and COO, marketing and commercial, TKM, said: “The market sentiments do not seem to be improving. In the last few months, we have made our best efforts to control inventory both at TKM and at our dealers end.” While the Etios sold 2,804 units, the Liva sold 1,616 units.

Tata Motors sold 9,272 units of its passenger cars during the month, down by 62.41 percent (December 2012: 24,669 units). While the Nano, Indica and Indigo range of passenger cars sold  6,537 units, the Sumo, Safari, Aria and Venture range managed to sell 2,735 units during the month.

Ford India clocked domestic sales of 5,871 units, down 9.91 percent (December 2012: 6,517 units). The EcoSport sold 3,905 units, ahead of the Mahindra Scorpio and Renault Duster which sold 3,418 and 2,613 units respectively.  The Figo sold 1,862 units.

General Motors India, on the other hand, sold 5,705 units last month as against 7,067 units sold during December 2012, a fall of 19.27 percent. The Tavera sold 870 units.

Honda Cars India (HCIL) saw a growth of 29.5 percent on its December 2013 sales with 5,493 units sold. (December 2012: 4,242 units).  The Amaze sold 4,458 units, the Brio 1,026 units and nine units of the CR-V. Jnaneswar Sen, SVP – marketing & sales, HCIL, said: “2013 was a very good year for Honda Cars India as we crossed the 100,000 mark in domestic sales for the first time in a calendar year with sales 107,661 units.”

TWO-WHEELERS SAVE THE BLUSHES

With all vehicle segments taking a beating in December 2013, the two-wheeler category was the sole segment with positive numbers (up 2.32 percent) and sales of 1,163,465 units (December 2012: 1,449,203). Of that, scooters notched a handsome 29.86 growth, contributing sales of 301,714 units (December 2012: 232,343).

Hero MotoCorp (HMCL) sold 524,990 units as against 541,615 units sold in December 2012, down by 3 percent. However, the company claims it had its best ever calendar year performance with total sales of 61,83,784 units. Anil Dua, senior vice-president (marketing & sales), HCL, said: “While in 2013, we adopted a fresh approach with increased focus on technology, innovation and youth-centric products, 2014 will be action-packed with radically new product launches, entry into new markets backed by new, clutter-breaking campaigns and continued network expansion.”

Honda Motorcycle & Scooter India (HMSI) sold 296,144 units during the month, up by 36 percent (December 2012: 217,498 units). While motorcycles, which saw sales of 125,109 units during the month (December 2012: 106,254 units) grew by 18 percent, it was the scooters segment which made a mark. HMSI sold 171,035 scooters, up a solid 54 percent over December 2012 sales of 111,244 scooters. In terms of models, the Dream Neo commuter motorcycle sold over 100,000 units in seven months of its launch.

Selling 260,645 motorcycles (domestic and exports) during December 2013, Bajaj Auto (BAL) registered a fall of 13 percent over 298,350 units sold in December 2012. Year-to-date (April-December 2013) sales stand at 25,97,112 units, down by 10 percent (April-December 2012: 28,97,410 units).

TVS Motor Company’s total domestic two-wheeler sales accounted for 132,664 units in December 2013 as against 134,566 units registered in December 2012. Scooter sales did better than bikes recording a 38 percent increase from 30,398 units in December 2012 to 41,817 units in December 2013. Motorcycle sales were down to 57,576 units against 60,210 units in December 2012.

India Yamaha Motor sold 39,777 units in the domestic market against 25,123 units sold in December 2012, up 58 percent. 

Mahindra Two Wheelers recorded domestic sales of 19,054 units during the month, up by 267 percent on a low base. Driven by the demand for the Centuro, the company is expanding production as well as increasing its sales and service touch points to over 1,000 across the country.

With just one remaining quarter in 2013-14, OEMs will hope that sales will continue in positive territory but there appear to be few reasons to think sales may rise. The year is likely to go down as one of the worst in living memory. However, some new passenger car models have done well going by the likes of the Honda Amaze and the Hyundai Grand i10. Also, two-wheeler sales seem above water and may yet rescue the Indian auto sector at the end of the fiscal when the final numbers are tallied. 

Photograph: The Grand i10 continues to bring in the numbers for Hyundai, selling 9,077 units in December. Rivals like the Maruti Swift and Honda Brio sold 16,788 and 1,026 units respectively during the month which saw overall passenger car sales down by 4.52 percent to 132,561 units.