Shifting gears; December Auto sales shows recovery

The car and bike segment  sales in India in the month of December witnessed impressive growth from various auto majors, with the likes of Maruti Suzuki, Tata Motors, Eicher Motors and TVS Motors displaying growth while Hero Motocorp registered de-growth. Bajaj Auto has come up with a flat sales figure. However, most of the Commercial Vehicles makers like Ashok Leyland, Eicher Motors, Tata Motors and Mahindra Tractors saw a robust growth in sales number Y-O-Y, primarily driven by improving macro-economic sentiments and the increasing economic activity in the domestic economy.

Passenger and Commercial Vehicle Segment

Market Leader Maruti Suzuki came out with an impressive set of numbers. Total sales grew by 8.5 per cent Y-O-Y from 1,09,791 to 1,19,149 units, led by a decent domestic sales growth of 13.48 per cent. Super Compact (Dzire Tour) and Utility Vehicle (Gypsy, Ertiga & S-Cross) segment saw a very strong growth of 115 and 59 per cent respectively. The Compact segment also saw a good pickup in demand with the recent launch of Baleno & Swift Limited edition cars, as they grew by 14 per cent Y-O-Y. However the Company’s exports were down 33 per cent.

Tata Motors total sales declined by 4 percent from 41,734 to 39,973 units mainly due to the de-growth seen in the domestic passenger segment which decreased by 33 per cent largely due to high competition in the segment and no new launches. However, the MHCV & LCV segments where the company enjoys  leadership position, continued its good run growing 6 & 11 per cent respectively as compared to the same period last fiscal. Total exports grew by 15 per cent from 3958 to 4557 units Y-O-Y. The sales have also been impacted due to a higher base effect as during the corresponding period last year in anticipation of increase in excise for the month of January 2015.

Mahindra & Mahindra India's leading SUV manufacturer registered a 4 per cent growth in its total sales numbers Y-O-Y. Total sales grew from 36,328 to 37,915 units. Domestic sales were disappointing as they grew by mere 1 per cent which mostly directed to overall sales to be lower. The Passenger vehicle segment numbers came in flat. MHCV space too registered a flat sale growth. Nevertheless, exports jumped by a strong 65 per cent. Mahindra & Mahindra Farm Equipment saw a rise of 3 per cent in its tractor sales from 12474 to 12868 units.

Engineering and farm equipment major Escorts today reported 9 per cent decrease in its tractor sales from 3021 to 2751 units Y-O-Y.  Atul Auto registered a good growth of 8 percent in its sales volume, which rose from 3708 to 4005 units on Y-O-Y basis. SML Isuzu saw a decline in its sales volume by 18 per cent.

Ashok Leyland posted a 31 per cent increase in its sale volume from 9290 to 12,209 units, even after facing disruptions in its Chennai plant due to floods. The  Company has been growing its volumes due to the uptick seen in the economy and new order wins by the company both domestically and export markets. The MHCV segment surged by 35 percent whereas LCV segment saw an increase of 18 percent in sales on yearly basis.

Eicher Motors Commercial Vehicle business saw a robust sales growth as total sales augmented by 45 per cent Y-O-Y contributed mainly by Bus and HCV segment which saw volume picking by 95 & 55 per cent respectively.

Two wheeler & three wheeler segment

Eicher Motors Motorcycle division registered yet another solid monthly sales number despite its  Chennai Unit being shut for six days. Sales grew by 41 per cent Y-O-Y from 28,634 to 40,453 units. Domestic sales saw good traction as they increased by 42 per cent.

Bajaj Auto saw a flat total sales volume. The  Company sold 2,89,003 units in the month of December. Domestic sales saw an increase of 17 per cent, whereas total exports again declined by 12 per cent on a yearly basis led by weakness in key markets like Nigeria & Egypt.

Hero MotoCorp December registered a de-growth of 5 per cent as it declined from 5,26,097 to 4,99,665 units compared to the corresponding period last fiscal.

Chennai based TVS Motors, saw its total sales increased by 4 per cent from 1,94,481 to 2,02,086 units Y-O-Y led by strong domestic sales as it rose by 5 percent Y-O-Y from 1,61,512 to 1,69,315 units. The  Scooter segment led by Jupiter continued its strong sales volume as it increased by 21 per cent. However, exports remained flat.

Reacting to a good set of numbers stocks of various auto majors were up in trade despite a negative market. Ashok Leyland was up by 4 per cent and Eicher Motors was up by close to 1.5 per cent in trades.

Overall the auto sector continued its recovery. However, exports continued to remain weak given the weak global environment. Going forward, with the economic revival kicking in and slew of new launches in the upcoming auto expo, one will be able to gauge the success of  future launches of these auto companies.