February 2014 Automobile Sales Remain Weak

On February 17, 2014, the finance minister P Chidambaram in its interim budget announced to cut excise duty on some section of automobiles. Following the new duty structure, most of the auto makers reduced the prices of the vehicles. Some automobile companies have shown signs of improvement in the last week of February.

Maruti Suzuki reported a decline in total sales by more than 0.4% to 109104 units in February FY14 compared to the same month of last year. The domestic sales of the company have increased by more than 1.8% on yearly basis to 99758 units in the month of February. The export has reduced by 19.5% on yearly basis to 9346 units in the month of February 2014 compared to the same period of last year.The newly launched Celerio compact car has aided in the growth of the domestic sales of the company.As per the report, the car was launched on February 6, 2014, and since then the company has sold more than 20000 units of the model. Helped by the Celerio sales, the company's compact car segment has increased by more than 19% compared to the same month of the previous year.

On cumulative basis, Maruti Suzuki reported a decline in total sales by more than 0.93% to 1041691 units in February FY compared to the same month of year 2013, while the domestic sales of the company has increased by more than 0.87% on yearly basis to 9,51,420 units in the month of February. The export of the company has reduced by more than 16.67% on yearly basis to 90271 units in the month of February 2014 compared to the same period of last year.

Tata Motors standalone numbers reported a drop of 35.56% in total vehicle sales to 39951 units in February 2014 compared to the same month of last year. The domestic sales of the company stood at 35315 units in the month of February 2014 reporting a decline of 3.66% in February FY14 as compared to the same period of previous year.

On cumulative basis, the total vehicle sales of Tata Motors have increased by 8.4% on yearly basis by selling 515511 units till February 2014. The domestic sales of the company stood at 470807 units till February 2014. The company sales from export stood at 44704 units till February 2014, reporting a growth of 11.57%.

Bajaj Auto has reported a total sales of 313294 units in February FY14 reporting a decline of 5.74% as compared to the same period of previous year. The company has managed to increase their revenue from export. The export sales stood at 142009 units till February 2014 as compared to the same period of previous year, reporting a growth of more than 5%. The domestic sales of the company reduced by more than 13.16% to 171285 units compared to the same period of last year.

On cumulative basis the total sales has reduced by more than 9.4% to 3565760 units in February FY14 as compared to the same period of previous year. The domestic sales reduced by 16% to 2100008 units in February FY14 as compared to the same period of last year. The export increased marginally by 1% to 1465752 units during the February FY14 as compared to same period of previous year.

The total sales of Mahindra & Mahindra declined by 12% at 42166 units in February FY14 as compared to FY13. The sales of passenger vehicle segment (which includes UVs and Verito) dropped by 18% to 19308 units in February 2014 as compared to February 2013. The domestic sales of the company dropped by 11% to 39338 units in February FY14.

In the month of February, the four-wheeler commercial vehicle segment sales and the three-wheeler sales have dropped to 14,701 (3%) and 4,724 (2%) units respectively as compared to February 2013. The export of the company was down by 17% to 2828 units in February 2014 compared to same month of last year.

On cumulative basis, the total sales of Mahindra & Mahindra declined by 10.93% at 455540 units till February 2014 over 2013. The domestic sales and export both have reduced by 11% in February FY14 as compared to the same period of FY13. On the tractor segment M&M reported 18% growth in total sales at 17592 units in February 2014 compared to same month of previous year. The domestic sales rose by 19% to 16552 units in February 2014 over same month of previous year while the export has increased by 13% to 1,040 units in February 2014 compared to February 2013. On cumulative basis the domestic sales of tractors has increased by 23% to 240699 units till the month of February 2014 compared to the same period of last year.

Commenting on the performance of the company Pravin Shah, CEO, Automotive Division, M&M, said that, “The Auto Industry has received the much needed boost in terms of an excise duty reduction and this has resulted in higher enquiries over the last one week.”

In an effort to revive auto sales, the government decided to cut excise duty. But till now it has not made any significant impact on the sales volumes. This can be attributed to the other factors like sluggish economy, high interest rates and rising fuel prices.