Complete Auto Sales Analysis Feb 2018: CV segment continues to show strong growth

Passenger vehicles on a sticky wicket-Report based on results announced so far

The automotive sector experienced a mixed fortune during the just concluded month of February 2018. While new models drove the growth in the passenger vehicle segment, rising fuel prices, inflation and a spurt in interest rates have slowed down the industry as it nears the end of FY18.

Rise in passenger vehicle prices by many car manufacturers in January also stilted sales to a certain extent.

However some positives are the recovery in the economy with the GDP growing 7.2 percent in the Q3 quarter, ending December 2017. This stems from the pick-up in the manufacturing sector and in overall spending, the barometer of the economy bouncing back post demonetization and the enforcement of the Goods and Services Tax last July.

Increasing scooterisation has permeated the semi-urban and rural regions as well where hitherto motorcycles ruled the roost. With rural markets staging a recovery, two-wheelers are showing a robust growth.

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Meanwhile, infrastructure development and streamlining of the logistics and e-commerce sectors post GST, have given a fillip to the commercial vehicle market.

In addition, restrictions on truck overloading, stimulus to replacement buying have boosted the medium & heavy CV segment. The LCV market has also fared better due to two consecutive monsoon years and more disposable income in the hands of the rural populace due to a better crop yield.

Passenger Vehicles ride the price hike

The country’s largest carmaker by volume, Maruti Suzuki India posted a double-digit growth of 15.0 percent selling a total of 149,824 units in February 2018 compared to sales of 130,280 units in the same month last year. Domestic sales of passenger vehicles stood at 136,648 units (120,599 units) up 13.3 percent.

The compact car segment comprising the Swift, Baleno, Ignis, Celerio, Dzire and Tour S models led the sales blitz up 38.7 percent at 65,213 units (47,002 units). The new Swift had received 40,000 bookings before its rollout early February and along with the earlier model sold 14,445 units during the month ranking fourth in the pecking order in the Top 10 list of cars sold during the month.

The Baleno has already been a frontrunner model for the carmaker selling 17770 units during the month. With the Swift production being shifted to Gujarat, the Baleno has more production capacity available at the Manesar facility. Its waiting is down to 8-12 weeks easing pressure at dealerships as well.

The utility vehicle segment came next with an upswing of 13.8 percent at 20324 units (17863 units). The Mini growth however remained flat at 2 percent with sales of 33789 units (33079 units).

The Ciaz sedan continues to de-grow at 16.8 percent with sales of 4897 units (5886 units). A reason for this is the high GST rate enforced on hybrid cars. In the van segment the Omni and Eeco vans declined 12.5 percent with sales of 12425 units (14195 units).

A distant second was Hyundai Motor India that posted a moderate upswing of 5.1 percent to domestic sales of 44,505 units (42,327 units) with cumulative sales of 55,422 units (52734 units) up 5.1 percent.

Rakesh Srivastava, Director, Sales and Marketing, Hyundai Motor India said this performance was due to the good showing of Hyundai’s premium brands –the new 2018 Elite i20, next gen Verna and the Creta SUV.

Mahindra & Mahindra sold 22,389 passenger vehicles (20717 units) growing 8 percent during the month under review.

The company’s total domestic sales stood at 48,473 vehicles (40526 units) during February 2018, up 20 percent.

Rajan Wadhera, President, Automotive Sector, M&M attributed it to a sustained momentum and demand, both in the personal and commercial vehicle segments. “We believe it will also continue in the month of March.”

Tata Motors’ domestic sales of passenger vehicles were up 45 percent at 17,771 units in February 2018 against 12,272 units in the same month last year.

This uptick came on the back of its new models –the Tiago, Tigor, Nexon and the Hexa that have been raking the numbers. Its passenger car segment posted a growth of 17 percent while the UV segment faced a step up of 165 percent.

Toyota Kirloskar Motor (TKM) sold a total of 12,705 units during the month under review. Of this, domestic sales accounted for 11,864 units compared to 11,543 units sold in February 2017 witnessing a marginal growth of 2.78 percent

“We have started the year 2018 on a positive note with a cumulative growth of 11 percent in the first two months of Jan –Feb 2018,” said N. Raja, Deputy Managing Director.

Domestic sales of Japanese carmaker, Honda Cars India declined by 18.23 percent at 11,650 units (14,249 units) in the month under review.

Yoichiro Ueno, President & CEO, Honda Cars India said, “HCIL has witnessed strong sales momentum with the existing product line-up marking a cumulative growth of over 13 percent and we are confident of closing the financial year on a positive note. We showed our upcoming models at the recently concluded Auto Expo 2018 which has created a significant buzz in the market. The planned reduction in volumes of current Amaze resulted in lower wholesale in February.”

The latest models –the new City sedan continued to dominate local sales for Honda with 3885 units sold with the 2017 WR-V SUV nipping at its heels with 3364 units during February.

Ford India’s domestic wholesales grew 8.43 percent to 9,041 vehicles in February 2018 from 8,338 vehicles in the same month last year.

“Improvements in GDP growth and other industry indicators continue to support the year on year growth of the auto industry,” said Anurag Mehrotra, president and managing director, Ford India.

“However, there are headwinds in terms of impending increase in interest rates, crude prices, and inflation. We also believe the increase in customs duty and the cess of exports will drive up prices, with a potential of impacting demand.”

Courtesy:ET Auto

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