India Market Sales Analysis – July 2012

After a tepid first quarter in fiscal 2012-13, July 2012 sales numbers have brought a little cheer to automakers. Thanks to a flurry of discounts on a number of cars and utility vehicles, ahead of the festive season, most OEMs have reported sales increases in July.

Maruti Suzuki India, once again in the throes of a labour crisis, sold 82,234 units in July 2012 including 11,210 units for export as against 75,300 units in July 2011. Domestic sales were 71,024 units, 6.8 percent above year-earlier month figures. The Alto top scored with 17,422 units followed by the Swift (11,421 units) and the Dzire (11,413 units)

The month saw production come to a halt at Maruti’sManesar plant with the company declaring a lockout in the aftermath of a labour strife that claimed one life and injured about 100 people. Maruti has already gone on record to say that it does not have stocks of the Swift and Dzire, two models that sell approximately 30,000 units a month. While the SX4 saloon sold 679 units, the Kizashi sold just two. What will come as a boost to Maruti is the Ertiga MPV, launched in April, which has topped the 7,000-mark and driven into the Top 10 for the month.

Maruti apparently is set to resume operations at the Manesar plant on August 16 but clearly sales of the popular Swift and the Dzire, particularly in diesel form, will fall in the months to come, with deliveries having been severely affected by the near-month-long lockout.

Hyundai Motor India saw a 7.58 percent increase in domestic sales at 27,585 units compared to 25,642 units in the year-ago period. “The overall market demand is suppressed due to the general inflationary trend, high fuel prices and interest rates,” said vice-president (national sales) RakeshSrivastava in an official statement. The Eon sold 4,985 units, half its monthly average over the six months of 2012 at 8,000 units, as the impact of the petrol hike hit home. The i10 sold 6,113 units and did not make it to the Top 10 roster while in the A3 segment, the Verna sold 5,300 units. The company sold 85 units of the Santa Fe SUV and 32 units of the Sonata luxury saloon.

Tata Motors sold 26,240 units in July, over 50 percent as compared to 17,192 units sold in July last year. The Nano sold 5,485 units as against 3,260 units in July 2011. The Indica range sales were 8,852 units, its best showing in recent months and up 51 percent over the 5,860 units sold in July last year. The Indigo and Manza range recorded sales of 6,816 units, higher by 40 percent over the 4,877 units sold last July.

Mahindra & Mahindra’s July sales increased 15 percent to 42,799 units during July 2012, as against 37,323 units during July 2011. The passenger vehicles segment (which includes UVs and Verito) has registered a growth of 27 percent, having sold 22,011 units in July 2012, as against 17,312units during July 2011. The Bolero continues its superb performance, selling 9,312 units while the XUV500 topped the 4,000-unit mark selling 4,007 units. Pravin Shah, chief executive, Automotive Division, M&M, said: “July 2012 is the second highest monthly sales for us. The industry needs to be concerned about slower economic expansion and consumer sentiments which are not so positive.”

General Motors India posted a fall of 23.38 percent in its July sales at 7,285 units as against 9,508 units in the same month of 2011. Model-wise, GMI sold 534 units of the Spark, 4,354

Beats, 176 Aveos and 501 units of the Cruze. It also sold 1,615 Taveras during the month. “The sales are not on the expected lines as the market continues to remain sluggish due to high interest rates, high fuel prices and various other factors,” the company’s vice-president P Balendran said. GMI has gone on record to say that the Aveo and UVA will be withdrawn after September as the company prepares to launch a host of new models.

Ford India sold 6,236 units in July, down nearly 17 percent over the 7,504 vehicles in the same month last year. In the month, the company commissioned its expanded engine plant in Chennai, increasing annual engine production capacity by 36 percent to 340,000 units including an additional 80,000 diesel engines, which will help feed the surging demand for diesel powertrains in India and export markets. Michael Boneham, president and MD, Ford India, said: “We believe the difficult market situation will ultimately recede in the long run and we are confident of meeting the increased demand for cars in the festive period with our expanded capacity in engines,” Boneham added.

Toyota Kirloskar Motor’s sales went up by seven percent in July 2012 to 14,574 units as compared to 13,592 units in the corresponding month last year. While the Innova sold 6,678 units as compared to 4,816 units sold in July last year, the Fortuner recorded a growth of 24 percent, selling 1,316 units last month as compared to 1,060 units in July 2011. The Etios and Liva sold 6,024 units as compared to 6,646 units in the corresponding month last year while the Corolla Altis sold 540 units last month.

“The Innova and Fortuner sales continue to grow with the increase in production. There has been a drop in sales of the Etios series as we exported 1,488 units to South Africa,” said Sandeep Singh, deputy managing director, marketing.

Honda Siel Cars India sold 4,386 units in July as against 4,725 units in July 2011. The tally in the month is as follows: Brio (1,715), Jazz (598), City (1,843) and Civic (138). The company’s Greater Noida unit is up and running but with an all-petrol portfolio, selling has become a major challenge for the company. Nissan Motor India sold 3,481 units in July 2012 compared to 1,593 units a year ago. Its entry-level saloon, the Sunny sold 2,436 units and the Micra sold 1,028 units. The rest comprised the Nissan Teana, the X-Trail SUV and the 370Z sportscar.

Volkswagen India sold 5,357 units in the month, down 20 percent as against last July. The Polo accounted for 3,498 units and the Vento 1,546 units. Both the VW models have been under pressure for a while now. While the badge-engineered Skoda Rapid has been neck and neck with the Vento, the Polo is under pressure from the likes of the Toyota Etios and the all-new Swift. Meanwhile, Skoda India sold 2,045 units in the month, down 20 percent — the Rapid sold 1,505 units and the Fabia just 215 units.

The Renault Duster SUV, launched in early July, sold 1,194 units. The company has received an estimated 10,000 bookings for the vehicle which could a volume-getter for it. The product is pitched at an upcoming segment in which Maruti is, so far, the only player with the Ertiga.

In the luxury segment, Audi sold 680 units. The German carmaker reported 98 percent sales growth in July 2012; the brand has grown 49 percent during January-July 2012, selling 4,680 vehicles as compared to 3,145 vehicles sold during the same period last year.

Meanwhile, rival BMW launched its new 3-series saloon at a starting price tag of Rs 28.9 lakh for the base 320d variant, going up to Rs 37.9 lakh for the petrol 328i Sportline variant. The car will be powered by two engines, a diesel 2.0-litre producing 181bhp and 38.74kgm of torque, along with a petrol 2.0-litre four-cylinder pumping out 241bhp and 35.69kgm of torque. The 3-series is new from the ground-up, and is tasked with continuing BMW’s dominance over key rivals like the Audi A4 and the Mercedes-Benz C-class.

Flat 2-wheeler sales point to slowdown

Hero MotoCorp Ltd (HMCL) reported flat sales of 484,217 units in July 2012, compared to 491,036 units in July 2011. This is the first time in several months that sales have fallen below the 500,000 mark which had become a habit of sorts for the company. Hero’s performance, considered a bellweatherfor the industry as a whole, is a clear indication of the impact of the slowdown. Commenting on the performance, Anil Dua, senior vice-president (marketing and sales), said: “The two-wheeler industry has been experiencing sluggish growth for the past few months. We are strengthening our brand in the midst of a challenging environment where a patchy monsoon, rising petrol prices and high interest rates have been affecting retail sales in both rural and urban markets.” The company had registered its highest ever quarterly sales of 16,42,292 two-wheelers in the first quarter this fiscal, fuelled by two consecutive months of highest-ever monthly sales in April (551,557) and May (556,644 ). June sales comprised 534,091 units.

HMCL recently announced the setting up a Global Parts Centre (GPC) at Neemrana in Rajasthan. The GPC, which is expected to be operational in the third quarter of the next financial year (2013-14), will be set up with an initial investment of Rs 160 crore and will employ 400 personnel.

Bajaj Auto sold 318,095 units in the month, down three percent from the year-earlier month numbers. The company has launched a couple of scooters including the Pulsar NS and the Discover 125 which it hopes will give it the numbers during the festive season.

Honda Motorcycle & Scooter India (HMSI), which is gunning for the No 2 spot in the industry, continued to post handsome sales increases. Its July 2012 performance saw it notch a 56.9 percent increase with total sales of 239,094 units comprising 109,493 motorcycles (up 80 percent) and 129,601 scooters (up 41 percent).

TVS Motor Co, which recorded negative growth of 12 percent, has reported domestic sales of 140,822 units for July 2012 as against 160,348 units in July 2011. These comprised 53,355 motorcycles (70,170 units in July 2011), while scooters registered sales of 40,895 units (49,333 units in July 2011). Exports too were down, with two-wheeler numbers being 17,132 units in comparison with 26,324 units in July 2011.

Suzuki Motorcycle India registered a 48.8 percent increase in its July 2012 sales figures as compared to July 2011. It sold 40,295 units in July 2012 as compared with 27,088 units in July 2011. Atul Gupta, vice-president, sales and marketing, said: “We have received a good response from the market for all our products. The newly launched Hayate mass market motorcycle has also received a tremendous response.”

Mahindra 2 Wheelers which has launched the Duro DZ will soon roll out its next new scooter — the stylish and fully loaded Rodeo RZ. The company recently opened its new R&D centre in Pune. The company’s cumulative scooter sales from April to July 2012 stood at 40,539 units. Sales in July 2012 were 10,051 units.

Overall, last month's sales, to some extent, bring cheer to automakers. However, all said and done, vehicle manufacturers are keeping their fingers crossed. Challenging market conditions continue unabated in the automobile market. A poor monsoon, high fuel and interest rates and a subdued consumer sentiment are not the best combination for growth. SIAM too last month had revised its growth projections for the passenger car industry from the earlier 10-12 percent to 9-11 percent.

BRIAN DE SOUZA