Automobile Sector On A Road To Recovery
Gaurav Girdhar / 12 Sep 2014
After two years of sluggish sales automobile sector finally seems to be on a road to recovery. This seems to be primarily because of the positive sentiment in the economy supported by macro-economic data that consumers are willing to spend. The automobile sector after few quarters of sluggish sales has recorded an increase of 14.86% in August 2014.
According to Society of Indian Automobile Manufacturers (SIAM), the total number of vehicles produced in August 2014 was 1943134 as compared to 1691699. The sales of passenger vehicles grew by 4.46% in August 2014 over the same period last year. Within the passenger vehicles segment, passenger cars and utility vehicles grew by 5.24% and 9.46% respectively, while vans de- grew by 13.89% in April-August 2014 over the same period last year.
Three-wheelers sales grew by 16.88% in April-August 2014 over the same period last year. Passenger carriers and goods carriers grew by 18.42 % and 9.94 % respectively in April-August 2014 over April-August 2013. Two-wheelers sales registered growth of 14.79% in April-August 2014 over April-August 2013. Within the Two-wheelers segment, scooters, motorcycles and mopeds grew by 30.72%, 10% and 9.11% respectively in April-August 2014 over April-August 2013.
In April-August 2014, overall automobile exports grew by 21.30% over the same period last year. Passenger vehicles, commercial vehicles, three-wheelers and two-wheelers grew by 0.17%, 16.51%, 14.53% and 29.16% respectively during April-August 2014 over the same period last year.
However, the recently announced numbers by Tata Motors were disappointing as sales of commercial & passenger declined by 18% and so did domestic sales by 19% on a Y-o-Y basis in August 2014. The exports were also down by 7% on a Y-o-Y basis in August 2014. Also, the Jaguar Land Rover sales figure were down 6.1% and stood at 5074 units in August 2014 as compared to 5405 units in August 2013 quarter.
Companies are also launching new vehicles such as Tata Motors’ Zest, Bolt, Honda Mobilio, Hyundai’s i20 elite etc, which is a positive sign indicating the manufacturers are expecting a push in sales in the coming quarters.
The recovery will be slow and will take time to get into full momentum; so investors can keep a watch on auto stocks as with the increasing positive sentiment these can perform well in the near future. So, during the next quarter the companies can register strong sales figures on the back of boost in sales due to combination of factors such as the arrival of festive season and improved consumer sentiment.
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