India Market Sales Analysis – September 2012

The slowdown in vehicle sales is real and present. Coming on the back of a lacklustre first five months of the current fiscal, the poor September sales numbers will have got most manufacturers worried. A combination of increasing fuel prices, high vehicle finance rates and depressed market sentiment is translating into fewer footfalls in showrooms. Clearly, the festive cheer in the marketplace which OEMs are desperately awaiting is absent and the think-tanks at most OEMs will be actively looking at new ways to get buyers to loosen their purse-strings. The saving grace for the industry were the numbers posted by Maruti Suzuki India, India’s largest carmaker, and Mahindra & Mahindra, which continues to ride the burgeoning demand for Utility Vehicles and SUVs.

Maruti Suzuki India, which is all set to launch its new 800cc Alto, posted a near-13 percent increase with sales of 88,801 units (September 2011: 78,816). This growth however is on September 2011’s smaller base when the carmaker was hit by labour unrest last year. These September sales also come after a month in which Maruti’s sales plunged 40 percent as a result of the month-long lockout in July-August 2012 at the Manesar unit. While the Alto sold 21,209 units retaining its top slot, the Wagon R sold 16,456 units, its highest since March 2012. Given that this vehicle is only available in petrol, its performance is spectacular. Clearly, the car is emerging as the second option for car buyers. Last month, Maruti launched the WagonR Pro with some additional features which appeared to have wooed more customers into dealerships. Among the key performers in the month were the Dzire, which sold over 11,000 units, and the Ertiga which, along with the Grand Vitara and Gypsy, sold a total of 7,224 units. However, later this month, Maruti will debut its new Alto 800 which has been developed on the existing platform. While it does not have major changes in its interiors or external looks, the refresh which boasts fuel efficiency of 22.74km a litre, could well give Maruti big numbers in the upcoming festive season.



Meanwhile, Hyundai Motor India Ltd (HMIL) reported a 14.3 percent decline sales to 30,851 units (September 2011: 35,955 units), down 14.2 percent. Rakesh Srivastava, vice-president (national sales), said: “We expect the suppressed demand would improve on account of festive purchases as the demand peaks during this period.” In September, in the A2 segment (Eon, Santro, i10 and i20), the carmaker sold 46,414 units, while A3 segment (Accent, Verna) sales stood at 6,287 units. The new Elantra, launched in mid-August, sold 781 units, the Sonata sold only 20 units and the Santa Fe SUV went home to 56 buyers.

Tata Motors’ total sales of passenger vehicles in September 2012 were 21,652 units (September 2011: 26,319), lower by 18 percent. Nano sales at 5,491 units were up 87 percent (September 2011: 2,936). The Indica and Vista sold 7,936 units ((September 2011: 10,282), lower by 23 percent. The Indigo/ Manza range recorded sales of 3,706 units (September 2011: 7,793), down 52 percent.

The other OEM to drive into positive territory was Mahindra & Mahindra (M&M) with 22 percent growth, selling 48,342 units, up 10 percent over YoY sales (September 2011: 44,137), even as demand for SUVs continues to grow. This is its all-time high across all categories. The government had hiked diesel prices by Rs 5 a litre last month, which is likely to have a marginal impact on sales of SUVs, the majority of which run on diesel, but the impact will not be huge. Speaking on the company’s overall performance, Pravin Shah, chief executive, Automotive Division, M&M, said: “We are happy with the performance and growth that we have achieved during September 2012. After the reduction in CRR, banks have started cutting lending rates and are also looking at reducing vehicle loan rates. We are hopeful of a good performance in the upcoming festive season”.

M&M’s half-yearly (April-September 2012) consolidated sales numbers stood at 267,266 units, up 20 percent over the corresponding period in 2011. Passenger vehicles recorded a 22 percent growth at 23,808 units. While the refreshed Verito sold 1,536 units, the XUV500 which has completed a year sold 4,603 units. The manufacturer has a good order book and the XUV500, which is clocking good sales numbers, currently has a waiting period of between 6-14 weeks in different parts of the country. Also, the seven-seater Quanto mini-SUV, launched on September 21, has received over 5,000 bookings in the three weeks since its launch.

Toyota Kirloskar Motor sold 12,115 units in September 2012 (September 2011: 12,807), down five percent. Model-wise, the Innova registered 23 percent growth with 5,858 units sold (September 2011: 4,765). The Fortuner, which sold 1,301 units (September 2011: 1,078) posted 21 percent growth. The Etios and Liva sold 4,440 units (September 2011: 5,926), down 33 percent. While the newly-launched Camry, now made in India, sold 85 units last month, the Corolla Altis sold 424 units.

General Motors India reported a 26.78 percent decline in its sales for September 2012 at 7,403 units (September 2011: 10,112). Last month’s sales include 254 units of the Spark, 4,539 Beats, 320 Cruze saloons and 2,136 Taveras. The company is banking on a slew of new cars to boost sales in the remainder of the year. First off the block is the Chevrolet Sail, designed in China by the GM-SAIC design centre there, and scheduled to be launched by end-October. The company will then launch the Enjoy MPV later in this fiscal. GM India will also launch a refreshed version of the Spark this month. Ford India’s domestic sales declined marginally to 7,794 units in September 2012 (September 2011: 7,801). The Figo continues to be its mainstay with the company selling 6,279 units.

Honda Cars India sold 5,508 units (September 2011: 4,758), an increase of 16 percent. Model-wise, the Brio sold 2,064 units, the Jazz 556 and the City, 2,815 units.

Nissan Motor India, which launched the Evalia on September 25, recorded domestic sales of 3,574 units in September 2012 (September 2011: 2,176). The Sunny saloon and Micra hatchback comprised the bulk of this with total sales of 3,567 units. Nissan says the Evalia has received 160 bookings and hopes to sell 2,500 units per month. Meanwhile, its alliance partner, Renault India continues to bask in the performance of the Duster SUV which sold 4,211 units in September . The Pulse sold 524 units.

In the luxury segment, Audi witnessed its highest-ever grossing month in India with a sale of 1,011 vehicles in the month, up 82 percent over the 555 units sold in September last year.

Two-wheelers feel the heat too

The sales slowdown in September has not spared the two-wheeler sector. Market leader, which posted consecutive months of 500,000-plus unit sales earlier this year, sold 404,787 units (September 2011: 549,625 units). Anil Dua, senior vice- president (marketing & sales), said, “September numbers reflect the prevailing market sentiment and the upcoming festive season is expected to improve the overall disposition.”

Meanwhile, the company says it has completed its brand migration exercise at the end of last month, launching brand ‘Hero’ and its range of two-wheelers in Sri Lanka and Nepal in alliances with local partners.



Bajaj Auto sold 315,314 units in the month (September 2011: 371,208), down 15 percent. The company sold 9,000 Pulsar 200 NS and 35,000 Discover 125 ST bikes. September sales of the Discover were more than the big-selling Hero Splendor for the first time ever but it remains to be seen if this will endure. It’s plausible to say that lower sales of the Splendor could be the result of inventory corrections.

Meanwhile, TVS Motor Co’s sales for September 2012 fell by 23 percent: 170,097 units as against 219,369 units in September 2011. Domestic sales fell from 192,027 units in September 2011 to 149,191 units in September 2012. The company recently launched a premium 125cc bike, the Phoenix which will compete with the Honda Shine, Bajaj Discover and the Hero Super Splendor and Glamour. The company previously had a 125cc Flame that didn’t do quite as well. TVS’ scooter sales also fell, from 55,879 units last September to 40,055 units last month.

Riding high on the success of the Dream Yuga, Honda Motorcycle & Scooter India (HMSI) recorded sales of 242,941 units (including exports and CKD units) in September 2012 (September 2011: 178,462), up 36 percent. HMSI sold 113,379 motorcycles and 129,562 scooters in September 2012 reporting a YoY growth of 60 percent and 21 percent respectively. Domestic sales were up 38 percent as compared to those in September 2011.

India Yamaha Motor, which sold 30,638 units in September as against 32,637 units in September 2011, registered a sales decline of six percent in the domestic market. The company has launched its 113cc Ray scooter last month and has already received around 9,000 bookings. This is the first scooter in its product portfolio and India Yamaha Motor, whose all-new plant in Chennai will go on stream next year, is targeting a market share of 20 percent in the scooter segment by 2016.

Mahindra Two Wheelers sold 8,122 units in September. The company has launched a new communications campaign for its scooter portfolio to boost buyer confidence as the festive season approaches. Viren Popli, executive vice-president – strategy and market development, said an aggressive marketing has been lined up but gave no details.

Overall, September saw two key launches – the Mahindra Quanto in the midsize segment and the Yamaha Ray scooter. October will see a host of companies go all out to woo customers ahead of the festive Diwali season. Will the new products give a much-needed boost to flagging sales? Stay tuned.

BRIAN DE SOUZA

HOW THE COMMERCIAL VEHICLE SECTOR FARED IN SEPTEMBER '12

On the CV front, market leader Tata Motors sold 48,680 units, a five percent growth compared to the 46,247 vehicles sold in September 2011. While LCV sales were 33,393 units (September 2011: 28,092), up 19 percent, M&HCV sales totaled 15,287 units (September 2011: 18,155), down 16 percent. With an eye on the upcoming competition from an aggressive Daimler India Commercial Vehicles, which has launched a trio of BharatBenz trucks, Tata Motors recently launched six new trucks including a more affordable Prima LX range. The new LX range with its Prima 4923 and 4023 tractors is the most significant as they come with a 230hp Cummins engine (as against 270 for the regular range) and simpler, de-contented cabins at a new price point. Tata also launched its in-house-designed Fleetman telematics service targeted at CV fleet owners and logistics service providers. The service will initially be introduced on new tractor-trailers, but will be available on the entire Tata Motors M&HCV range in the coming months. It will also be extended to existing vehicles, through aftermarket fitments.



Eicher Motors, which sold 3,026 units (September 2011: 4,152) recorded a fall of nearly 27 percent in the above-5 tonnes segment. Fortunes turned around a bit in the bus category with sales growing by 11.3 percent to 612 (September 2011: 550). In the heavy duty segment, the company posted a growth of 12 percent with sales of 5,172 units in September ’11 to 5,812 units for the same month this year. Overall, in the six-month April-September 2012 period, Eicher recorded a growth of 4.5 percent in sales with 34,915 units (April-September 2011: 33,411 units).



Ashok Leyland posted 21 percent growth, selling 10,623 units (September 2011: 8,803). Of this, the Dost small commercial vehicle contributed a substantial 3,027 units. Cumulative April-September 2012 sales were 57,327 units (April-September 2011: 43,146), up 33 percent and mainly driven by the Dost which has sold 15,913 units in the half-year period.

Daimler India Commercial Vehicles, which made its India debut in September with the launch of three heavy duty trucks, also launched BharatBenz Financial under the umbrella of Daimler Financial Services. Four banks have been roped in as part of this initiative to help potential customers.

KARTHIK H