India Market Sales Analysis – January 2013

With the passenger car and CV sector wilting under the pressure of high interest rates and dipping consumer demand, automakers are hoping for a friendly Budget.

Autocar Pro News DeskBy Autocar Pro News Desk calendar 14 Feb 2013 Views icon2710 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
India Market Sales Analysis – January 2013
Passenger car sales in the first month of the new year continued to play out the skidding act with January 2013 numbers falling for most OEMs, year on year. The worst hit were Tata Motors, Toyota Kirloskar Motor and Ford India. But it’s not that the other OEMs fared better as the combination of high interest rates, increasing fuel prices and poor market sentiment saw hugely reduced footfalls in showrooms.

Maruti Suzuki India reported an overall (domestic and exports) 1.06 percent drop in sales at 114,205 units in January, adversely affected by the 22 percent drop in exports at 11,179 units (January 2012: 14,386). India sales saw a marginal 2 percent increase at 103,026 units (January 2012: 101,047 units). The Alto topscored with 28,685 units while the Swift and Dzire sold 18,928 and 17,060 units respectively.

The SX4 is fast falling out of favour with consumers and sales, at 1,012 units (January 2012: 1,939), were down by 47 percent.

What helped Maruti’s numbers was the sustained popularity of the Swift Dzire midsizer, which notched a handsome 97.5 percent growth with sales of 17,060 units (January 2012: 8,637). Cumulatively too, this car has helped boost Maruti’s numbers. Between April 2012-January 2013, the Dzire has sold 131,177 units, up 66.9 percent over the 78,613 units sold a year ago. The Ertiga too is a prime mover for Maruti. The MPV, launched in April 2012, was the biggest contributor to the 6,095 sales in the UV category which includes the Gypsy and Grand Vitara.

Hyundai Motor India, India’s second largest carmaker, posted a 4.3 percent overall sales growth. While domestic sales grew 1.2 percent to 34,302 units (January 2012: 33,900), exports grew 10.8 percent to 17,722 units (January 2012: 16,001).

The company has announced a price rise across its model range, starting from the Eon hatchback through to the Santa Fe SUV by up to Rs 20,878, citing an increase in input costs and currency fluctuations. While the Eon sold 8,261 units the i10 and i20 sold 8,552 and 8,655 units respectively.

HMIL's executive segment offering, the Elantra sold 488 units, ahead of its rivals the Corolla and Chevy Cruze. According to Rakesh Srivastava, vice-president (sales & marketing), “The market was subdued on account of macro-economic factors. For Hyundai, the year has started on a positive note with growth in its domestic and export sales. The change in the price differential between petrol and diesel has increased interest in petrol cars, which has got reflected in the waiting period for the Eon, i20 and Verna petrol. Marketing initiatives in the rural markets are bringing volume growth.”

Mahindra & Mahindra, which has since the past year been riding the demand for SUVs, posted a 33 percent sales increase. It sold 26,555 units in January 2013 (January 2012: 19,975). According to Pravin Shah, chief executive (automotive division), M&M, “The recently announced reduction of 25bps both in the repo and CRR rates is a positive step and is expected to bring in the desired momentum in the market.”

Like M&M, Renault India too is reaping the benefits of growing sales of its Duster SUV. Burgeoning demand for the SUV, which sold 3,554 units, saw the carmaker post a total of 4,914 units in January. The other contributors were the Scala (812 units), Pulse (403 units), Fluence (108 units) and Koleos (37 units). With January 2013’s sales, the company has sold a total of 37,508 units in the first 10 months of the fiscal (April 2012-January 2013).

“2012 was a year of growth for Renault India, with over 35,000 units sold across India as well as starting the export of the Duster,” said Sumit Sawhney, executive director (marketing & sales), Renault India.

Honda Cars India notched a handsome 205 percent growth. Its January sales tally was 5,451 units (January 2012: 1,784), as consumers took to the Brio hatch in a bigger way with 2,336 units sold. The City sold 2,898 units while the Civic and Jazz sold 53 and 61 units respectively.

Tata Motors, which saw sales decline sharply in December 2012, continued its dismal run in January. Its sales of 15,209 units (January 2012: 34,669), were down 56 percent and constitute the worst fall in the current financial year. The company sold 11,192 units of the Nano, Indica and Indigo range along with 4,017 units of the Sumo, Safari, Aria and Venture vehicle range.

Toyota Kirloskar Motor too suffered a sales decline. At 13,329 units (January 2012: 17,395), January sales were down by 23 percent. Along with exports of 1,791 units of the Etios series to South Africa during January 2013, TKM registered total sales of 15,120 units.

Sandeep Singh, deputy MD and chief operating officer (marketing & commercial), said: “The market is still witnessing a slowdown, especially the passenger car segment. The prospects for the second half of 2013 look better. The repo rate cut is a welcome step. With the Budget around the corner, we are looking for some more measures that will bring about positive growth.” Ford India, which is gearing up to launch the EcoSport SUV in April, posted a sales fall of 33 percent with 6,062 units (January 2012: 9,137). Along with exports of 1,053 Figos (January 2012: 1,652), the company sold a total of 7,115 units in January 2013.

“Despite a tough business environment with the hike in fuel prices and ongoing high interest rates, consumer interest in Ford vehicles continues to hold steady. To offset the prevailing tough conditions and introduce buoyancy into the market, we hope the government will introduce regulatory policies that are conducive to the growth of the automotive industry. We believe that the reduction in the differential between diesel and petrol prices and recent RBI’s decision to cut repo rate are progressive steps and should continue,” said Vinay Piparsania, executive director, marketing, sales and service, Ford India. General Motors India, which launched the Sail saloon on February 1, posted a sales decline of 8 percent with 7,588 units (January 2012: 8,241).

Hero MotoCorp back in the numbers

Market leader Hero MotoCorp, riding on robust volumes driven by its Splendor and Passion brands and growing sales of new products like the Ignitor, Passion X-Pro bikes and Maestro scooter, sold a record 557,797 units in January (January 2012: 506,426), a 10.14 percent increase. Its January sales are the highest-ever sales for any single month, the previous highest being in May 2012 with sales of 556,644 units.

Commenting on the performance, Anil Dua, senior vice-president (marketing & sales), Hero MotoCorp, said: “Our new motorcycle launches like Ignitor and Passion X-Pro are receiving excellent customer response, while growth in our scooters – Pleasure and Maestro – is outpacing the industry growth. The overall two-wheeler industry is again showing good volumes, and we are hopeful of keeping up the momentum.”

However, what could be disconcerting for the company is the growing incidence of worker unrest over salaries. Workers at Hero MotoCorp’sGurgaon plant have been, for the past month, pressing for a revision of salaries. Meanwhile, Honda Motorcycle & Scooter India (HMSI) is maintaining its consistent growth. In January, it posted a 21 percent increase with sales of 230,304 units (January 2012: 189,351). On January 18, HMSI opened its state-of-the-art Honda Technical Centre in Manesar and also revealed its updated scooter line-up for the year, powered by new-generation Honda Eco Technology aimed at delivering up to 11 percent improved fuel efficiency. Bajaj Auto, which rolled out its new Discover 100T commuter bike last month, notched sales of 219,142 units in January 2013, down 0.79 percentYoY (January 2012: 220,879).

TVS Motor Company’s domestic two-wheeler sales totaled 154,107 units (January 2012: 153,104). While bike sales were 64,555 units (January 2012: 65,608 units), scooters sold 37,946 units (January 2012: 41,469 units), down 8.5 percent and indicative of the fact that new rival scooters in the market are grabbing TVS’ share.

Suzuki Motorcycle India, riding on sales of the Hayate commuter bike, sold 39,982 units (January 2012: 35,099), up 14 percent. Speaking on the results, Atul Gupta, vice-president (sales and marketing), said: “We have received a good response for all our products. Growing customer satisfaction has led to positive word-of-mouth in the market.”

India Yamaha Motor notched 13 percent growth with sales of 29,785 units (January 2012: 26,300).

Commercial vehicle sales dip sharply in January 2013

If the passenger car sales trend is worrying, then the commercial vehicle sector has much to be worried about. CV sales fell for the 11th month in a row and OEMs are facing the brunt of low demand and delayed purchase of new vehicles due to high interest rates and weak demand for freight transportation. Tata Motors, the country’s largest CV player, saw its January 2013 overall sales grow six percent to 42,571 units. But that growth is essentially in the LCVs (January 2013: 33,849) because M&HCVs suffered a steep 52 percent drop in January 2013, selling 8,722 units compared to 18,338 units in January 2012.

Cumulative CV sales in the domestic market for the fiscal were 432,941 (LCVs: 315,041/ M&HCVs: 117,900), up 15.26 percent over the cumulative sales of 375,632 units in the April 2011-January 2012 period.

Ashok Leyland registered an overall growth of 2.53 percent with total sales of 10,561 units in January 2013 (M&HCVs: 6,863/ Dost SCV: 3,698. The company saw a sharp 25 percent decline in M&HCV sales: 6,863 units compared to 9,200 units in January 2012. Cumulatively too, M&HCV sales are down 14 percent to 62,955 units in January 2013 compared to 72,821 units a year ago. Overall cumulative sales though are up 18 percent, thanks to the sterling performance of the small commercial vehicle, the Dost which has contributed 27,571 units to the total sale of 90,546 units in the April 2012-January 2013 period.

Eicher -branded trucks and buses recorded sales of 3,736 units in January 2013 as compared to 3,708 units in January 2012, representing a growth of 0.8 percent. In the domestic CV market (5 tonnes and above), Eicher trucks and buses recorded sales of 3,638 units as compared to 3,551 units in January 2012, a growth of 2.5 percent. In the bus segment, sales stood at 506 units (Janaury 2012: 365), an increase of 38.6 percent. In the heavy duty truck segment, sales were 674 units (Janaury 2012: 579), up 16.4 percent. Meanwhile, Mahindra Navistar Automotives, the commercial vehicle arm of Mahindra & Mahindra, saw sales dip 33 percent to 1,024 units as against 1,543 units in January 2012.

Fingers crossed. . .

With the Union Budget to be announced on February 28, OEMs are keeping their fingers crossed and wishing fervently that the finance minister P Chidambaram delivers some industry-friendly measures designed to give a fillip to sales.

On January 9, SIAM had further revised its downgrade for passenger car sales for the fiscal. In the meantime, the recent RBI move to reduce repo and CRR rates which has led to banks reducing interest charges on auto loans is expected to feed some power into the market, translating into improved volumes in the coming months.

Will the remaining two months of the current fiscal provide enough numbers to go beyond SIAM’s slashed growth forecast? The first clues will come on February 28.
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