The automobile sector in India has been amongst the hardest hit by the slowdown. Month after month passenger and commercial vehicle sales figures paint an increasingly dismal picture. In February, a majority of the auto segments recorded a yearly decline. The two-wheeler market was an exception. Perhaps many who are borderline first time car buyers are deferring their purchases in favour of a two-wheeler thanks to weaker finances and the reluctance to undertake large new borrowings.
Overall, passenger vehicle (PV) sales fell 3.2% Y/Y, while commercial vehicles (CV) sales—considered a bellwether of the economy—declined by a fourth. The only silver lining for the automotive sector was the continued robustness of two-wheeler sales. It grew 9.3% on a Y/Y basis, however on a month-on-month basis there was a fall of 5.6%.
Automakers such as players like Honda (both cars and two-wheelers) and Yamaha registered strong volumes, while Tata Motors, Bajaj Auto and M&M witnessed a sharp decline in sales compared to last year.
The domestic auto industry as a whole grew 5% compared to last year, but was down 6% since January.
Here’s how some of the large listed automakers performed.
Tata Motors’ sales declined 35.6% Y/Y 39,951 units in February. Sales of compact car Indica and Indigo remained stagnant, while the micro segment represented by the Nano grew 66% Y/Y largely on account of a very small base.
The company’s CV volumes were also poor with a sharp fall of 37% Y/Y. In this category, the medium and heavy vehicles (M&HCV) sales declined 8.2% to 10,456
units, while its light commercial vehicles (LCV) volume plummeted 48% in February. The Company lost significant market share in the PV and CV segments in the month. Market share in PV declined by 267 bps Y/Y to 6.1%, and alarmingly, its share of the CV marked dropped by 990 bps to 45.7%. Tata Motors’ volumes are expected to fall further nearly by a third in the next couple of months.
M&M’s auto sales declined 11.8% Y/Y, while its auto exports fell 17.4% in February. The performance of M&M mainstay, the utility vehicles (UV0 were also a big disappointment. Their sales dropped nearly 17%.
M&M’s CV volume was flat while there was reason for mild cheer in the tractors division which saw an 18% higher sales at 17,592 units. Analysts are cautious about M&M’s performance in the key UV segment. A strong recovery may be possible only by FY15.
ALL’s LCVs sales fell 23.5%. The company recorded a 10% fall in M&HCV truck segment while the M&HCV bus segment declined 42% in February. ALL lost market share in M&HCV bus segment by 1,488 bps to 34.5%, while its market share marginally grew by 87 bps to 26.6% in the M&HCV truck segment in February. Analysts expect the continued fall in ALL’s sales to reflect poorly in its coming quarterly numbers.
Maruti Suzuki’s performance has been stellar, relatively speaking. At least the company managed to hold its ground unlike many of its competitors. Volume declined only marginally by 0.4% Y/Y. In February its MPV sales bounced back with volume growth of 22% against an industry wide decline of 33%.
The sales of its compact and super compact cars like the A-Star, Alto and Wagon R declined 1.8% to 74,008 units. The company’s overall market share rose 256 bps to 45.8% in the domestic PV segment in February.
A slew of new launches planned for 2015 is expected to help Maruti make a swift and smart recovery.
Hero’s domestic volumes grew 0.6% to 504,181 units, while its exports declined 25%.- This month the company witnessed a growth of 4.2% in its 75cc-110cc motorcycle Segment, while, it grew 3.4% in the 110cc-125cc segment (Hero Super Splendor and Hero Glamour). It reported a decline of 60% in the 125cc-150cc segment.
However sales in the scooter segment rose 2.3%. Analysts expect low single digit growth in volume of the Company in FY14.
Bajaj Auto’s overall sales decreased 5.7% to 313,294 units in February. In domestic market, the company witnessed a sharp fall of 55%, 8.4% and 12.4% in 110cc-125cc, 125cc-150 cc and 150cc-200cc segments respectively. Its three-wheeler volumes declined 3%. Bajaj witnessed a 10.6% growth in three-wheeler exports. It saw a 4% increase in motorcycle exports in Feb’14.
Analysts expect the Bajaj’s domestic as well as export volume to struggle to cross the low single digits in FY14.
Its volumes rose 7.2% to 177,662 units in February due to a 5.8% growth in two-wheelers and 54% increase in three-wheeler sales. Its domestic scooter segment too grew strongly by 39%.
The domestic motorcycle segment however witnessed a 6% Y/Y decline mainly due to weakness in the 75cc-125cc segment. Analysts expect an uptick in volumes for TVS Motors going forward, backed by continued Volume gains in the scooter segment.