India Market Sales Analysis – July 2011

The slowdown in the auto sector continued to have its impact on passenger car sales for the fourth month in a row. As a result of the diesel price hike of Rs 3 per litre in June (in May petrol prices rose by Rs 5 per litre) and a sharp increase in lending rates by the RBI, which effectively increased loan rates, sales fell in July.

Maruti Suzuki India sold 75,300 vehicles in July 2011 including 8,796 exports as against 100,857 vehicles in July 2010. Domestic sales comprised 66,504 units as against June 2010 sales of 70,020 but they were impacted by the decision to shift manufacturing of the Dzire saloon from Manesar to Gurgaon. This adversely affected production, due to which Dzire sales fell by over 5,000 units in July 2010 at just over 3,000 units. Topping July 2011 sales was Maruti's all-time favourite, the Alto which clocked 24,974 units, slightly higher than June but below its last year's average of 25,000 and odd units. The Wagon R sold 10,629 units. Meanwhile, Maruti has begun manufacturing the new Swift that will be launched country-wide in mid-August. During July, the company despatched 348 units (old Swifts) as against 11,828 Swifts in July 2010.

Hyundai too feels the pressure

After bucking the sales slowdown of June, Hyundai Motor India Ltd saw its domestic sales drop 11 percent to 25,642 units as compared to 28,811 units in July 2010. Arvind Saxena, director, marketing and sales, said: “Though customer enquiries grew, the increase in fuel price and interest rates has impacted sales.” HMIL’s segment-wise cumulative sales for July 2011 were: A2 segment (Santro, i10, i20) 41,533 units; A3 (Accent and Verna) 7,980 units; and A5 (Sonata Transform) 13 units; Santa Fe (SUV) 141 units.

Tata Motors’ passenger vehicle business reported a decline as compared to June 2011 with sales of 18,294 units (17,192 Tata + 1102 Fiat) in the domestic market in July 2011, down 39 percent as compared to 30,166 units (27,865 Tata + 2,301 Fiat) in July last year. Tata’s tally was impacted by falling sales of the Nano (3,260 units) and the Indica range at 5,860, down 32 percent over July 2010. The Indigo range also bore the brunt of the slowdown with 4,877 units sold, down 30 percent over July last year.

Sounding a different note in July was Mahindra & Mahindra, whose domestic sales of 37,323 units marked a 42 percent rise as against 26,303 units sold in July 2010. The Verito notched 117 percent growth with 1,630 units sold as against 752 units in July 2010. An estimated 70 percent of M&M’s car sales are of diesel variants, which have clearly benefited from the hike in petrol prices. M&M’s passenger vehicle segment alone (which includes UVs and Verito) recorded a 35 percent increase, selling 17,312 units in July 2011 as against 12,825 units in July 2010. The Bolero continued its good run with 7,817 units and M&M is working on a face-lifted version that may help boost its sales.

Toyota Kirloskar Motor was also among the few carmakers to come out smiling in July with sales of 13,592 units as against 6,834 in July 2010, a 99 percent increase thanks to the smart sales performance of the Etios and hatchback sibling, the Liva. According to Sandeep Singh, deputy MD, “The Etios and Etios Liva sold 4,095 units and 2,551 units respectively, in July 2011. The new Corolla Altis sold 1,030 units while the Innova and Fortuner sold 4,816 and 1,060 units respectively.”

Honda Siel Cars India sold 4,725 units in July comprising 4,092 Citys, 275 Jazz hatchbacks and 233 Civics, to mention the top three contributors. Honda City sales have clearly benefited from the substantial cut in prices in June. Skoda Auto India sales for July 2011 stood at 2,412 units as against 1,222 units in July 2010. The company plans to introduce two new models this year including the Laura RS and an entry level saloon. Skoda, which has 81 showrooms across India, has been focusing on its dealership network and aftersales service.

Nissan Motor India sold 1,593 units in July 2011 compared to 1,005 units in July 2010. The Micra, the first model to be produced at Nissan’s Chennai plant, has been the main driver accounting for 1,550 units in July 2011 as against 928 units in July 2010. Since it went on sale last July, Nissan has sold over 18,000 Micras in India and the diesel variant, launched in December, has helped push up the numbers. On August 3, Nissan revealed its Sunny midsize saloon, which will go on sale around the festive season powered by a 1.5-litre petrol engine.

Volkswagen India sold 6,529 cars in July 2011, a growth of 151 percent over the 2,597 units sold in July 2010. The Polo and the Vento continue to bring in the numbers for the brand with 6,353 units sold in July 2011. The Jetta sold 109 units in July and the company is gearing up to launch the new Jetta on August 17.

Two-wheeler sales keep flag flying

In the two-wheeler segment, Hero MotoCorp Ltd (the new name for Hero Honda) sold 491,036 units in July 2011, up 14.82 percent over the corresponding month in 2010, when it had sold 4,27,686 units. Cumulative April to July 2011 sales stood at 20,20,613 units, a growth of 21.6 percent over the corresponding period in 2010, when it had sold 16,61,725 units. Anil Dua, senior vice-president (marketing & sales), said: “We are happy to cross the two million mark in the first four months of 2011-12. The good numbers for July have come about despite constraints on supply from our Haridwar plant due to the ‘Kawar’ movement in the region during the month as a result of which we had had to keep the Haridwar plant closed for a few days.”

Meanwhile, Bajaj Auto sold 318,095 motorcycles in the month with its key brands, Pulsar and Discover, accounting for 64 percent of all sales.

TVS Motor Company’s total two-wheeler sales grew at 16.3 percent in the first quarter of the current fiscal at 535,000 units compared with 460,000 units in the corresponding period of 2010. Motorcycle sales grew at 10.3 percent to 224,000 units in the first quarter from 203,000 units in the quarter ended June 2010. Scooter sales grew 25.3 percent to 119,000 units in the April-July quarter from 0.95 lakh units during the corresponding quarter of the previous year. India Yamaha Motor recorded a 28.5 percent growth in its overall sales of 38,197 units in July 2011 as compared to 29,728 units in July 2010. In the domestic market, it sold 29,021 units in July 2011 as against 22,899 units last year. Export sales stood at 9,176 units in July 2011 as against 6,829 motorcycles sold in July 2010. Hiroyuki Suzuki, CEO and MD, India Yamaha Motor, said, “The new variants of the FZ and SZ Series have largely contributed to the highest-ever monthly sales we have achieved in domestic market this year.”

The company also launched the ‘Yes!Yamaha’ campaign that aims to offer customers the best 3S experience. Several other consumer-centric marketing initiatives include the Yamaha R15.

One Make Race, Yamaha Safe Riding Science for college students and kids and Yamaha Service Camps.

Mahindra Two Wheelers said its July sales stood at 13,012 units. Total cumulative sales from April to July 2011 comprised 45,288 units, a growth of 15 percent over the same period last year when sales totalled 39,291 units.

BRIAN DE SOUZA