SLOWDOWN HURTS COMMERCIAL VEHICLES’ SALES Two-wheelers Fare Better, but CV Sales Slump in Dec

Strong rural demand helps two-wheeler cos record robust sales

Strong rural demand and rising popularity of scooters helped twowheeler makers increase sales in December even as commercial vehicle sales plummeted in a slowing economy. Two-wheelers are the only bright segment in the Indian automobile industry that is going through one of the longest steaks of slump, and industry experts don’t expect a turnaround before the general elections this year. 
“The Indian auto industry is facing its most challenging times,” Sugato Sen, deputy director general at the Society of Indian Automobile Manufacturers (SIAM), said. “This is one of the longest spells of negative sales and all segments with the exception of the two-wheelers have declined in this fiscal.” SIAM expects a market turnaround only after a new government comes to power later this year. Hero MotoCorp, the world’s largest two-wheeler company by volumes, reported a 3% year-on-year fall in December sales, but its former partner Honda recorded a 36% jump in sales. 
Honda Motorcycle & Scooter India was powered by a 54% rise in scooter sales at 1.71-lakh units. The Japanese firm’s motorcycle sales, too, grew 18% to 1.25-lakh units last month. Despite its slide in December, Hero posted its best-ever calendar year sales in 2013, selling 61.83-lakh bikes and scooters, up from 61.20-lakh two-wheelers in the previous year. Hero’s sales for the festive quarter of October to December rose 7% to 16.80-lakh units. 
A 38% rise in scooter sales to 41,817 units helped TVS Motor Company stay positive in December, while Delhi-based Yamaha Motor India posted a whopping 58% jump in sales on the back of robust demand for its Ray and Ray Z scooters. The company sold 6,51,487 two-wheelers in 2013, 34% more than the previous year. Roy Kurian, vice-president for sales and marketing at Yamaha Motor India, attributed the rising sales to expanding dealership network and a strong product portfolio. 
Riding on the success of its newly launched Centuro motorcycle, Mahindra 2wheelers posted 267% increase in its December sales. 
While the two-wheeler makers are confident about the new year, makers of cars and commercial vehicles are cautious after continuous poor performance. While car sales have dropped for almost 14 months in a row, the commercial vehicle segment has seen a fall in sales for 24 months at a stretch, signalling a drop in economic activity in the country. The country’s largest commercial vehicle maker Tata Motors sold just 25,738 commercial vehicles —18,079 light commercial vehicles and 7,659 medium and heavy CVs — in the domestic market last month, 46% lower than December 2012. Ashok Leyland reported 14% fall in sales last month. Its bigger trucks and buses sales fell 26% to 3,890 units. Delhibased truck and bus maker Eicher Motors’ sales dropped 30% in December. Analysts tracking the automotive market said some recovery may happen in the second half of the current year after the general elections. “The market may have bottomed out and may see some positive change post the elections with the installation of a new government and the expected changes in the economic situation,” Abdul Majeed, leader for automotive practice at global consultancy PricewaterhouseCoopers, said. Honda Cars Sales up 30% in Dec NEW DELHI: Honda Cars India clocked 30% growth in its domestic sales in December 2013. The Japanese carmaker sold 5,493 cars last month against 4,242 cars a year earlier. Driven by the success of its first diesel car, the Amaze, Honda sold more than one-lakh cars in India for the first time in a calendar year. Jnaneswar Sen, senior vice-president for marketing and sales at Honda Cars India, said the company sold 1,07,661 vehicles in 2013. During April-December, its sales grew 66% to 85,656 cars. Merc Posts 32% Growth: Mercedes-Benz India on Thursday reported 31.62% increase in sales in 2013 at 9,003 units. The company’s Indian arm Mercedes-Benz India had posted total sales of 6,840 units in 2012. Mercedes-Benz India MD and CEO Eberhard Kern said: “We are very satisfied with our performance in 2013. We are happy that our New AClass, New E-Class & the SUV portfolio saw robust demand amid challenging market conditions.” Stating that consumers have “appreciated our initiatives”, he said: “We enter 2014 with a promise of delivering excellence.”

Source: The Economics Times

       By:  CHANCHAL PAL CHAUHAN

No End to Auto Cos’ Woes, Car Sales Fall 5-7% in Dec Maruti Suzuki and Hyundai manage single-digit growth, but others continue to skid

India’s car market, which started on a weak note in 2013, ended the year equally dismally, completing an eminently forgettable phase. High interest rates, rising fuel prices and a gloomy economic atmosphere never allowed the passenger car market to get going last year. Despite offering record discounts and freebies in December, car companies’ sales during the month declined 5-7% to approximately 1.80-lakh to 1.84-lakh units against 1.94-lakh units sold in December 2012. 
Barring Maruti Suzuki and Hyundai Motor India, which posted single-digit growth in December last year, other players like Mahindra & Mahindra, Toyota Kirloskar, and General Motors India continued to falter and posted losses. 
Ford India, despite the success of its compact sports utility vehicle EcoSport, has seen sales of other vehicles decline. Sandeep Singh, deputy MD and COO, marketing and commercial, Ford India, said, “The market sentiments do not seem to be improving. In the last few months, we have made our best efforts to control inventory both at TKM and at our dealers end.” 
What’s worse is that things aren’t going to look up in a hurry. Experts say tough times are likely to continue for the next 3-6 months at least till the general elections. 
Mahindra & Mahindra, which was an outperformer before FY-14, saw a reversal in fortunes this fiscal due to increase in excise duty on SUVs and diesel prices. 
“The auto industry has seen a negative growth due to sustained deceleration in economic activity and consequent weakness in consumer and business sentiments. While the immediate turnaround in the auto industry is not expected without certain policy corrections and support, the worst seems to be over,” Pravin Shah, chief executive, automotive division, Mahindra & Mahindra, said. A drop of 7% in sales for December meant that for the entire 2013, the sales of passenger vehicles dropped by over 7%-9% during 2013, one of the lowest growth rates in a decade.


Barring a couple of months during the festive period, the Indian car market saw a year-on-year decline in sales for most part of 2013. Rakesh Srivastava, senior VPsales & marketing, Hyundai Motor India, said 2013 had the most challenging market scenario, but yet it was a rewarding year for the company as it managed to meet the annual targets, thanks to the good response to its new car Grand i10. 
Srivastava said, “Hyundai improved the channels efficiencies, launched new model Grand on new global platform, made strong initiatives in rural & exchange sales to increase its market share to highest level since inception and achieved the annual business plan. In 2014, Hyundai will launch many new products and new initiatives to build further on this positive momentum,” he said. 
The two-wheeler companies and other commercial vehicle manufacturers will announce their numbers in the coming few days.

Source: The Economics Times
By: KETAN THAKKAR