INDIA SALES ANALYSIS: MARCH 2016

by Autocar Pro News Desk , 04 Apr 2016


If January and February 2016 sales numbers were tepid, then March sales have given most of the biggies reason for cheer.

Sales march for most carmakers in last month of FY2015-16

Maruti Suzuki India and Hyundai Motors India, the top two carmakers in the country, have set the tempo for last month, both clocking handsome sales for the month and the overall fiscal year. Joining them in the sales spree is Mahindra & Mahindra.

For the just-ended 2015-16 fiscal year, the sales figures of the top three passenger vehicle (PV) makers in the country indicate that the Indian PV industry seems to be on track for posting healthy growth. Maruti Suzuki India and Hyundai Motor India, the top two players in the country, reported their best-ever domestic sales for the fiscal ended March 31, with growth of 11.5% and 15.1% respectively. Third in terms of market share and the largest UV maker in the country, Mahindra & Mahindra also reported a 6% rise in sales after two consecutive double-digit declines in the last two fiscals. As of February, the top three manufacturers constituted 72.61% share in the PV market. During FY 2014-15, the top three manufacturers in the country – Maruti Suzuki India, Hyundai Motor India and Mahindra & Mahindra –had sold a total of 1,815,338 units. In 2015-16, these manufacturers have sold 2,026,282 units, registering a YoY growth of 11.62%. A slew of product launches, softening interest rates and benign fuel prices played a big role in driving consumer demand for passenger vehicles throughout 2015-16. However, a challenging regulatory environment and fluctuating policy decisions during the last quarter of the fiscal did cap the overall growth potential for the industry.

Here’s looking at how some PV makers fared in March 2016.

Maruti Suzuki India sold 118,895 units in March 2016, up 14.6% year on year (March 2015: 103,719) with new models like the Baleno and Vitara Brezza making their impact. While the entry level duo of the Alto and Wagon R sold 36,678 units, down 8.7 percent (March 2015: 40,159), the compact car quintet of the Swift, Ritz, Dzire, Celerio and Baleno sold 46,786 units, up 20.9 percent (March 2015: 38,710). Demand for the premium Ciaz sedan is on the rise, having sold 5,480 units, up 28.9 percent (March 2015: 4,251). Another solid contribution came from Maruti’s UVs – the Gypsy, S-Cross, Ertiga and Vitara Brezza – which together sold 13,894 units, up 123.4% YoY (March 2015: 6,218) – and also the Omni and Eeco vans, which sold 12,896 units, up 9.6 percent  (March 2015: 11,768).

Also read: Surging Maruti Vitara Brezza demand leads to 5-month delivery time for top-end variant

With this, the company has ended 2015-16 with its highest-ever sales of 1,305,351 units, a growth of 11.5% YoY in the domestic market (2014-15: 1,170,702). Yet another high is that, for the fourth year in a row, the top four best-selling models in in the country are from Maruti cars: the Alto, Dzire, Swift and the Wagon R. On the export front too, the carmaker has notched its highest numbers yet: 123,897 units, up 1.8% (2014-15: 121,173).

Hyundai Motor Indiawhich like Maruti, clocked its highest-ever financial year domestic sales of 484,324 units to notch 15.1 percent YoY growth and sold 41,201 units in March 2016, up 4.24 percent (March 2015: 39,525).

Commenting on the March numbers, Rakesh Srivastava, senior vice-president (Sales and Marketing), Hyundai Motor India, said, “For FY2015-16, Hyundai has achieved its all-time highest volume and highest-ever market share of over 17 percent thanks to the strong performance of models like the Creta, Elite i20 and Grand i10."

The Creta, launched in July 2015, became a true game-changer for the company in India and took the SUV market by storm. With average monthly sales of around 7,000 units, the Creta has been a regular feature among the top 10 most sold cars in the country throughout the year and established Hyundai as a force to reckon with in the fast growing SUV market in India.

Mahindra & Mahindra (M&M) seems to have found its mojo on the sales front. The company reported a 6 percent rise in total domestic passenger vehicle (PV) sales for 2015-16 to 236,307 units. This growth comes after two consecutive fiscals of double-digit decline for the automaker. In 2014-15, the company had sold 223,968 units in the domestic PV market with a dip of 11.94%, which was preceded by a decline of 18.14% in 2013-14, with sales of 254,344 units.

M&M reinvented its product strategy in 2015-16 by launching a total of nine new products and variants during the fiscal. This renewed strategy paid rich dividends for the company and strong market response for new products like the TUV300 and the KUV100 helped the automaker post positive numbers for the year. M&M had reported its best ever domestic PV sales in 2012-13, when the company sold 310,707 units with a growth of 26.46 percent. In March 2016, M&M’s passenger vehicles segment (which includes UVs, cars and vans) sold 26,885 units as against 22,183 units during March 2015, a growth of 21 percent.

Meanwhile, Honda Cars India recorded annual domestic sales of 192,059 units in 2015-16, a 2 percent growth over the previous fiscal (2014-15: 189,062). In March, the Japanese carmaker sold 17,430 units in March 2016, down 23.2 percent YoY (March 2015: 22,696). The City sedan was the best-seller with 5,662 units, followed by the Amaze (5,223), Jazz (3,683), Brio (2,158) and the Mobilio (610). 

Commenting on the sales, Jnaneswar Sen, senior vice-president – Marketing & Sales, Honda Cars India, said, “2015-16 was an eventful and rewarding year for Honda Cars India and marks the fourth  consecutive year of annual sales growth. The new fiscal year holds tremendous opportunity for our further growth as we will enhance our product line-up with the launch of new models and expand our dealer network. We are excited about the upcoming launch of the Honda BR-V which will mark our entry into a new product segment.”

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Tata Motors’ passenger vehicles division recorded sales of 8,454 units, a decline of 44 percent (March 2015: 15,039). Sales of the passenger cars in March 2016 were at 6,876 units lower by 47 percent over March 2015 sales, UV sales last month were lower by 23 percent at 1,578 units.

Renault India registered a robust growth of 160 percent, albeit on a low base, with monthly domestic sales of 12,424 units in March 2016 (March 2015: 4,782).  Driven by strong sales momentum of its new cars, the company cumulatively sold 29,289 units during January-March 2016 as against 11,404 units sold during the same period last year, posting a growth of 157%. The Kwid also made a comeback in the top 10 passenger vehicles in February with sales of 7,544 units.  Further, the company has ramped up the production capacity at its Chennai plant to meet the growing demand for the product apart from expansion of its product, network and customer engagement.

Speaking on the company’s sales performance, Sumit Sawhney, country CEO and managing director, Renault India Operations, said, “Renault is one of the fastest growing automobile brand in India. In a short span of time, we have exponentially grown our reach in terms of sales and network expansion. In March 2016, we recorded our best ever sales figures in India, and we will continue to maintain this positive momentum as we strategically work towards increasing our market share in India.”

Toyota Kirloskar Motor sold a total of 7,637 units in the domestic market in March 2016, down 42 percent on the year-ago sales (March 2015: 13,333). The decline is reflective of the ban on registration of diesel vehicles in Delhi and NCR, one of the top sales markets for the carmaker in India. However, the Camry has notched 46 percent growth in 2015-2016 when compared to FY 2014-2015. More than 90 percent of this growth is attributed to the increasing acceptance of the Camry Hybrid in the Indian market.

According to N Raja, director and senior vice-pesident (Sales & Marketing), “The success of the Camry hybrid indicates the willingness of the market to accept alternative fuel technology like hybrid which not only benefits the environment but also conserves fuel. We would like to thank the government which has encouraged our efforts to promote hybrid technology in India. This includes the VAT reduction by the Delhi government in the recent Budget, which would give a further impetus to the growth of hybrid vehicles in India.

We also think a reduction in import duty will further encourage manufacturers to import hybrid cars in India through the CBU route which will therefore encourage more customers to consider hybrid cars as a purchase option.”

Also read: Passenger cars record highest sales growth in 5 years during 2015-16

Two-wheeler sales rev up in India in March 2016, point to a smoother FY2016-17

In tandem with rising sales of passenger vehicles, the two-wheeler sector in India is also firing on all cylinders. Importantly, sales of motorcycles, which had seen a slowdown and caused a measure of concern to industry, are revving up once again.

A quick analysis of the sales performance as reported by the major two-wheeler OEMs for March 2016 reveals that the last month of FY2015-16 has had a positive impact on the industry sales.

All prominent manufacturers – Hero MotoCorp, Bajaj Auto, TVS Motor Company, Royal Enfield and India Yamaha Motor – barring Honda Motorcycle & Scooter India (HMSI), have reported a year-on-year growth in their respective monthly sales.

These top six players have reported double-digit growth of 13.04 percent YoY for the month. In terms of volumes, Hero MotoCorp and Bajaj Auto stand out for adding maximum volumes during March 2016.

Hero MotoCorp reported total sales of 606,542 units (including exports), a growth of 14.07 percent (March 2015:  531,750). While the company saw consistent sales of its Splendor, Passion and HF Deluxe brands, it gained remarkable traction in the 125cc category – a class dominated by HMSI with its CB Shine model – on the back of strong sales of its Super Splendor and Glamour brands.

The company has also performed well in the scooter segment by recording an increase in its market share of 14 percent to close to 21 percent. This growth is attributed to its recently launched scooter models – the Duet and the Maestro Edge.

According to the company, March 2016 was the third month when it recorded total sales of more than 600,000 unit sales in 2015-16. Prior to March 2016, Hero had recorded 600,000 unit sales in September and October 2015.

On the cumulative sales front, the company reported sales of 66,32,322 units during FY2015-16 as against FY2014-15 sales of 66,31,826 units, which marks growth albeit by a thin margin.

With FY2015-16, the company says that it has completed five years of leadership since it commenced its solo journey following its split with Honda of Japan in December 2010. According to Pawan Munjal, chairman, managing director and CEO, Hero MotoCorp, “In the past five years, we have consolidated our leadership in the face of a volatile market and intense competitive environment, even as Brand Hero has become globally known with a presence in about 30 countries across Asia, Africa and Central and South America.”

“FY 2016 has also been a landmark year for us as we achieved several firsts in our solo journey – launched our first in-house developed products, commissioned our first overseas manufacturing facility and began operations at our world-class Center of Innovation and Technology at Jaipur. In addition to our continued leadership in the 100cc motorcycle segment, we also further augmented our leading position in the 125cc segment. We backed these achievements with strong financial results as well. The industry witnessed mixed fortunes in FY16 with sales looking up in the second half of the year. Timely measures by the government and a good monsoon will be essential in sustaining this positive trend. The journey from here promises to be even more exciting as we gear up to launch our in-house-developed products,” added Munjal.

HMSI feels the heat

Number two player and an arch rival of Hero MotoCorp, Honda Motorcycle & Scooter India (HMSI) has reported a decline in its sales for March 2016. The company sold 365,384 units in the domestic market, down 4.96 percent (March 2015: 384,452).

While HMSI maintains its leadership in the scooter market, its motorcycles sales have failed to deliver in terms of large volumes for a major part of the last fiscal. However, its all-new commuter, the 110cc Livo is reported to have made its mark as one of the top 10 bestselling motorcycles in January and February 2016. According to the company, it has sold more than 150,000 units of Livo within nine months of its launch.

On the cumulative front, HMSI recorded total domestic sales of 42,83,345 units during FY2015-16. An official release quotes that “increased efficiency and flexibility in production translated to a growth of 1% even as Honda’s all three existing plants in India continued to run on peak capacity.”

Speaking on the highlights of Honda’s performance in FY15-16, Yadvinder Singh Guleria, senior vice- president – sales & marketing, HMSI, said, “From a strategic perspective, FY2015-16 was like a base camp for Honda and now we are fully armed for the steep climb in FY2016-17. As part of our future preparedness, Honda aggressively invested in innovative promotion. Digital marketing activities and created top-of-the-mind recall in customers minds. All this reinforced the differentiated the ‘Wings’ mark identity of Honda 2Wheelers in India.”

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Bajaj Auto has reported total sales of 264,249 units in March 2016, thereby posting healthy growth of 25.87 percent YoY. The company had sold 209,937 units in March 2015. While the numbers include exports for the month, Autocar Professional estimates that the company may have recorded domestic sales in the region of 166,560 units. Its exports, on the other hand, are pegged to be in the range of 90,000-98,000 units in March 2016.

The company’s consolidated sales stand at 33,58,252 units during FY2015-16 as against total sales of 32,92,084 units in FY2014-15. This underlines growth of 2.01 percent YoY for Bajaj Auto, which it achieved on the back of several new product launches in the previous fiscal. Industry analysts say that several new projects in the pipeline will continue to fuel growth for Bajaj Auto in the new financial year as well.

TVS Motor Company has reported total domestic sales of 200,200 units in March 2016, which marks growth of 19.61 percent YoY (March 2015: 167,383). The company is riding on the growth of its scooter portfolio, which prominently comprises of its 110cc models such as the Jupiter, Wego and Zest.

The company has recently launched its 110cc mass commuter bike the Victor to garner volumes for itself in the coming months. Taking on the Honda’s Livo and Dream Series, the popular Victor model, which was originally launched by the company in 2002, now gets upgraded with a number of new value-for-money features in line with the growing benchmarks in the commuter bike segment. These include the company patented three-valve EcoThrust engine technology, petal disc brake and 60W high intensity headlamp, tubeless tyres, wide seat and modern styling.

Talking about the company's plans on the sidelines of the Victor launch in Pune recently, Arun Siddharth, head of marketing, TVS Motor Co, had said: “With a known name (Victor) in the family motorcycle segment, we are expecting to garner a bigger market share in the coming months. With the Victor positioned in the family segment and TVS Star and Sport positioned in the executive and budget categories respectively,  we believe that now our portfolio of commuter motorcycles is complete. We hope that the three different models will deliver expected results to us."

According to the company, the original Victor model, when it was first launched in 2002, had received a good response from the market and sold more than 40,000 units a month at its peak.

Recording an impressive YoY growth of 44.17 percent for March 2016, India Yamaha Motor has registered sales of 60,032 units as against 41,640 units sold off in March last year. The company says that scooters (primarily the Fascino model) and the 150cc FZ series portfolio are the main contributors to its growing volumes across the domestic territories.

Commenting on the same, Roy Kurian, vice president – sales & marketing, Yamaha Motor India Sales said, “Though the Indian two-wheeler market has seen a moderate growth of around 9 percent in the first quarter of 2016 as compared to the first quarter of last year, Yamaha has continued to ride the growth curve by marking a solid 47 percent sales growth during this period.”

The company is also planning to soon roll out yet another variant in its Ray scooter line-up, the Ray ZR, which was earlier unveiled at the Auto Expo in February. The company continues to expand its India network, which remains one of its top priorities.

“We have to increase our reach and we are working towards that. It will take us some time to expand our reach to that level. We had around 400 dealerships in 2014, over 500 dealers in 2015 and we are looking to close 2016 with 650-700 dealerships. Additionally, we will set up sub-dealers to penetrate further into the territories. We will pick up pace in the 110cc commuter motorcycle segment on the back of our network penetration,” Kurian had told Autocar Professional recently.

With the Met department predicting a normal monsoon this year, expect the fortunes of rural India to improve and in turn demand for mass market commuter bikes, which will drive growth for the two-wheeler sector. This, along with the ever-growing demand for gearless scooters, should spell good news for most two-wheeler manufacturers in 2016-17.

Recording a milestone in its history, Royal Enfield has reported total domestic sales of 50,059 units during March 2016 as against sales of 32,854 units in March 2015, thereby registering a year-on-year (YoY) growth of 52.37 percent in the domestic market.

It can be noted that the company had sold close to 50,000 units for the 12-month period of 2010, which underlines the surge in the demand of the Royal Enfield motorcycles over the last half a decade.

It has also recorded growth in its exports, which stood at 1,261 units last month, up by 52.85 percent. It had exported 825 units in March 2015. The company’s total sales including exports stood at a healthy 51,321 units during March 2016 – its highest-ever sales in a month.

Commenting on his company’s achievement, Rudratej Singh, president, Royal Enfield, said: “Reaching sales of over 50,000 motorcycles in a single month is a significant milestone for Royal Enfield. We approximately manufactured a similar number of motorcycles in 2010 (whole year) that goes on to show our focus and hard work that we have put in all these years. Royal Enfield also has been expanding its production commensurately to meet its customer’s expectations to own and ride our motorcycles at the soonest.”

Recommended: SIAM forecasts positive outlook for India auto sales in 2016-17

Commercial vehicles see record sales in March 2016

With improved traction on the sales front, thanks to the boost in infrastructure spend and benign fuel prices, the overall commercial vehicle sector has returned positive numbers in March 2016.

During fiscal 2015-16, medium and heavy commercial vehicles (M&HCVs) maintained their growth curve of the last 18 months with strong sales, largely due to fleet operators buying bulks of heavy trucks to update their ageing fleets. Moreover, after struggling for more than two years, the LCV segment has seen the green shoots of recovery and entered positive territory with single-digit growth. Importantly, March 2016 saw all key manufacturers register double-digit growth in their LCV sales.   

According to industry sources, with improving sales momentum, the LCV sector is set to notch continuous growth in the new fiscal year and will benefit from slowly increasing demand in rural India. Moreover, after experiencing two consecutive drought years, the Met has predicted good rainfall this year.

As per company-wise sales data, Tata Motors’ sold 38,247 units in March 2016, up 20% (March 2015: 32,005). M&HCV sales grew 24% at 18,538 units (March 2015: 14,878). Holding onto February’s uptick, its LCVs notched strong double- digit growth of 15%, selling 19,709 units (March 2015: 17,127).

Ashok Leyland’s overall sales at 16,702 units, were a handsome 31% up year on year (March 2015: 12,754). While its M&HCV sales rose 32% to 13,240 units (March 2015: 10,027), it sold 3,462 LCVs, up 27%.

Mahindra & Mahindra’s M&HCV numbers were up 86% on sales of 879 units (March 2015: 472 units). While the below-3.5 T GVW segment posted 20% growth with sales of 15,729 units (March 2015: 13,126 units), the above-3.5T GVW segment gained a strong 61% with sales of 830 units (March 2015: 516 units).

VE Commercial Vehicles recorded strong 45.5% growth selling 5,944 units in the domestic market (March 2015: 4,084 units).

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Recommended: EV sales in India touch 22,000 in 2015-16


 

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