INDIA SALES ANALYSIS: MAY 2014

Is it the Modi effect and are they the green shoots of recovery a beleaguered Indian automobile industry, which has seen its sales down for the past two years, been awaiting since long? As automakers revealed their sales numbers for May 2014, positive customer sentiment, particularly after the formation of a new government at the Centre, seems to have resulted in a lot more footfalls in showrooms and buyers making purchase decisions. While most carmakers have reported improved sales on an annualised basis, some of them growing in double-digits albeit on a low base, two-wheeler manufacturers are clocking even higher numbers than they have in the past six months.

Maruti Suzuki India has had a good sales outing last month. India’s largest carmaker, which opened the new fiscal 2014-15 with a 12.6 percent sales decline in April, saw its May 2014 numbers in the domestic market up 16.4 percent to 90,560 units as against 77,821 units in May 2013.

The company’s A-segment offerings that comprise the Maruti 800, Alto, A-star and Wagon R saw a 7.5 percent dip to 29,068 units (May 2013: 31,427). The compact car segment that includes the Celerio and Swift saw a handsome 53.9 percent increase to 26,394 units (May 2013: 17,147). The Celerio clearly is giving Maruti the sales fillip. On May 26, the carmaker launched the Celerio Green, the CNG-powered Celerio. The Celerio, which was launched at the Auto Expo this year on February 6, had sold 21,948 units till the end of April. The company at present has 45,000 bookings for the car and the waiting period has come down from around 8-9 months to seven months now.

The popular Dzire midsizer saw a 9.8 percent increase in its sales to 18,953 units (May 2013: 17,265). Meanwhile, the SX4 sold just 121 units, down 75.9 percent from 503 units in May 2013.

In the UV segment, Maruti sales were up 22 percent as a result of the Ertiga which retails about 4,000-and-odd units a month. The segment overall (along with the Gypsy and Grand Vitara) sold 5,253 units in May 2014 (May 2013: 4,307).

In the van segment, Omni and Eeco sales totaled 10,771 units, up 50.2 percent (May 2013: 7,172).

On the export front, sales rose 51.2 percent to 10,365 units as against 6,856 units in May 2013.

Hyundai Motor India Ltd (HMIL) sold 36,205 cars in May 2014, recording a growth of 12.8 percent (May 2013: 32,102).  Commenting on last month’s sales, Rakesh Srivastava, senior VP (Sales and Marketing), HMIL, said, “The success of the Xcent, Grand and Santa Fe increased volumes, creating positive momentum. We foresee to maintain this positive trend by strengthening our product portfolio and improving channel efficiencies.”

Mahindra & Mahindra (M&M) continues to feel the pressure of the slowdown in the domestic market, across all the vehicle segments it is engaged in. What’s more, with consumer preferences shifting towards petrol cars, M&M with its diesel-heavy stable of vehicles, is feeling the pinch of slowing sales.

In the passenger vehicle segment, in May 2014, the manufacturer has reported sales of 18,085 units comprising utility vehicles and the Verito and Verito Vibe passenger cars, down 18.70 percent on year-ago sales (May 2013: 22,244 units).

Its overall domestic sales including passenger vehicles, commercial four-wheelers, three-wheelers and trucks and buses were 35,499 units (May 2013:  42,104), down 15.69 percent. 

M&M sold 12,836 commercial four-wheelers last month, down 13.55 percent (May 2013: 14,848) and 3,732 three-wheelers, down 7.35 percent (May 2013: 4,028). Mahindra Trucks & Buses sold 846 vehicles in May 2014, down 14.02 percent (May 2013: 984)

The sole positive for the month was in exports where the company shipped 2,370 units (May 2013: 1,356), up 75 percent.

Commenting on the sales, Pravin Shah, chief executive, Automotive Division, M&M, said, "Auto sales continue to remain subdued at the back of yet another challenging month for the industry. After the electoral mandate, we expect to see improved sentiments resulting in a better economic situation which we hope will lead to a gradual increase in demand.”

Honda Cars India has sold 13,362 units in May 2014, up 17.81 percent over May 2013 (11,342 units), with the all-new City sedan leading the charge with 7,218 units sold and followed by the Amaze with 4,752 units sold. The fourth-generation City, now available with a diesel engine, has sold close to 40,000 units with the diesel outselling the petrol variant. Meanwhile, the Brio hatchback sold 1,333 units last month, its highest in this calendar year, while the CR-V sold 59 units.

The company has recorded an overall growth of 23 percent during the two-month April-May 2014 period with 24,402 units as against 19,830 units in the year-earlier period.

On the export front, the company shipped 518 units in May 2014.

Ford India, which re-opened bookings for the EcoSport SUV in May, sold 6,053 units last month, notching 51 percent growth (May 2013: 4,002). “A stable government is a positive development for overall economic and business sentiment in the country. We are hopeful that the new government will support ongoing industry-friendly initiatives like the excise duty reduction and look at further positive measures to improve consumer sentiment,” said Vinay Piparsania, executive director of Marketing, Sales and Service at Ford India. “We would look forward to the new government undertaking measures such as introduction of GST, rationalization of taxes and encourage foreign investment to promote sustained growth of the economy and the automotive sector,” he added. In May, the company re-opened bookings for all EcoSport variants.

General Motors India sold 4,865 vehicles in May 2014, down 42 percent (May 2013: 8,500). These sales include 1,716 units of the Beat, 1,076 Taveras and 934 Chevrolet Enjoys. “The automobile industry has been passing through challenging times for the past two years as the general economic and consumer sentiments have failed to pick up. Going forward, we hope to see some improvement in the market in the coming months with a new decisive government in place,” said P Balendran, vice-president, General Motors India.

Tata Motors saw its May 2014 sales fall 17 percent to 9,230 units (May 2013: 11,134). While the Nano/ Indica/ Indigo range sold 6,932 units, lower by 22 percent over 8,927 vehicles sold in May 2013,  the Sumo/ Safari/ Aria/ Venture range sold 2,298 units, a growth of 4 percent over the 2,207 units sold in May last year.

Toyota Kirloskar Motor, which had seen labour strife a few months ago, sold 11,833 units in May 2014, registering 18 percent growth (May 2013: 10,023). According to N Raja, director and senior vice- president, sales and marketing, “We have resumed normalcy in production and have registered growth in May. We launched the Etios Cross and the all-new Corolla Altis last month, which sold 555 units and 548 units, respectively.”

TWO-WHEELER SALES MAINTAIN MOMENTUM

Honda Motorcycle & Scooter India (HMSI) has reported sales of 355,726 units during May 2014, up by a substantial 55 percent (May 2013: 229,143). Taking the lead, the motorcycle segment recorded a growth of 76 percent by selling 160,295 units (May 2013: 91,280 units). Scooters raked in sales of 195,431 units, up by 42 percent (May 2013: 137,863). HMSI claims to have a domestic market share of 24 percent during the month, as the company is chasing its yearly target of 45 lakh units for 2013-14, thereby sustaining its momentum of 21 percent growth.

Bajaj Auto sold 313,020 motorcycles during May 2014, registering a flat growth of 2.7 percent (May 2013: 304,780). In a bid to boost sales, the company has recently added new colour options to its Pulsar line-up.

TVS Motor Company recorded a growth of 24 percent in its domestic sales of 174,234 units last month (May 2013: 140,056).

Yamaha Motor India sold 47,680 units in May 2014 (May 2013: 34,021). According to the company, the Alpha scooter and ongoing customer-centric activities have boosted sales. Roy Kurian, vice-president – sales and marketing, Yamaha Motor India, said: “This has been a good month for us as we witnessed brisk growth due to our excellent product line and innovative customer-centric activities. The Alpha, launched at the Auto Expo earlier this year, has been a major growth driver. We have achieved a 7.2 percent market share in the scooter segment last month and seek to sell 200,000 units of the Alpha alone, along with 100,000 units of the Ray and Ray Z combined, thereby constituting almost 50 percent of our total sales in 2014.”

Mahindra Two Wheelers has reported a growth of 131 percent in its domestic sales of 15,878 units during May 2014. The company had sold 6,858 units during the corresponding month in the last fiscal. Speaking on the May 2014 sales performance, Viren Popli, chief of operations, said, “We are happy to maintain the demand momentum of our two-wheeler division during May 2014 with a growth of 131 percent in the domestic market, which is indicative of the growing acceptance of our product portfolio especially our flagship brand, the Centuro. With a positive upsurge in socio-economic sentiments and on the back of improved demand, we hope to remain on the growth trajectory going ahead.” The company is all set to launch a 110cc automatic scooter and a 300cc naked street bike, Mojo in the near future.