INTRODUCTION
The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India manufactures over 17.5 million vehicles (including 2 wheeled and 4 wheeled) and exports about 2.33 million every year. It is the world's second largest manufacturer of motorcycles, with annual sales exceeding 8.5 million in 2009. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand.
As of 2010, India is home to 40 million passenger vehicles and more than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads.
QUARTER 1 REPORTS OF 4 LEADING AUTOMOBILE COMPANIES IN INDIA
· Hero Honda Q1 net profits rises 13% to Rs558 crore.
Bike maker Hero Honda reported a 13% rise in first quarter net profit as higher sales offset the increasing manufacturing costs due to costlier inputs. The company’s said net profit in the April-June 2011-12 quarter stood at Rs558 crore against Rs492 crores in the same period last fiscal. Sales volume of the company moved up 24% at 15.3 lack units, and this was the highest unit sales in any quarter. Hero Honda in the first quarter stood at Rs5638 crore against RS4265 crore in the first quarter of last year, a growth of 32%.
· M&M quarter1 net up by 8%, beats TATA Motors.
Mahindra & Mahindra braved a tough market, thus earning a yield of 8% profit growth. But margins fell down and is expected to stay lower in the coming months due to increased competitions. M&M, which overtook TATA Motors emerged as India’s largest utility vehicle maker in July. It posted a net profit of Rs.605 crore, major part of which coming from its sales of its popular SUV Scorpio ant Tractors.
Net sales rose 30.5% to Rs.6673 crores.
The company managed to defeat their rival TATA Motors to claim the top spot in utility vehicles. M&M Scorpio, Bolero and Xylo together sold more units then TATA’s Sumo and Safari in July 2011. This was the first time since 1990s that TATA Motors has lost its top slot in the segment of SUV’s. But the slowing economy due to certain factors like:
Ø Higher Interest rates
Ø Weak global financial markets
Ø Slow down in export growth
Ø Possible Diesel rates hike, put pressure on margins and profitability across India.
- Maruti Suzuki Q1 2011-12
| The Board of Directors of Maruti Suzuki India Limited approved the financial results for the first quarter of 2011-12 (April-June 2011) here today. The Company registered Net Sales of Rs 83,199 million during the first quarter of 2011-12, a growth of 3.3 per cent compared to the same period of the previous year. Net Profit during the quarter was Rs 5,492 million, a growth of 18 per cent Higher commodity prices and foreign exchange volatility put pressure on margins as compared to the same period previous year. The market was sluggish, mainly due to a sharp increase in fuel prices and higher interest rates. The Company's unit sales in the domestic market grew by 3.2 per cent during the Quarter. During the quarter, the Company sold 250,683 units in the domestic market. Exports were at 30,843 units, against 40,437 units in the same period of the previous year. Maruti Suzuki's volume in the domestic A3 segment grew by 5.7 per cent, compared to sales in April-June 2010. The A2 segment was flat (up by 0.3 per cent), while in the C segment, sales volume grew by 21.6 per cent. During the quarter the Company further strengthened its countywide network | ||||||||||||||||||||||||
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The country’s largest automobile company Tata Motors has reported a very marginal growth which is nearly 0.55 percent growth in consolidated net profit of Rs 2,000 crore for the quarter ended June 30, 2011. It had posted Rs 1,988 crore for the corresponding period a year ago.
According to reports, Tata Motors had witnessed a 23 percent growth in consolidated net sales at Rs 33,392 crore as against Rs 27,055 crore a year ago. It was also mentioned that Jaguar Land Rover (JLR) sales jumped 28.4 percent to Rs 19,776 crore from Rs 15,396 crore last year. For three months ending June 30, 2010, the company's net profit stood at Rs. 1,988.73 crore.
CURRENT SCENARIO
Depending on whom you ask or what you read, China has between 100 and 250 carmakers. Joint ventures with the global biggies dominate the top 10 - think General Motors (GM),Volkswagen (VW), Toyota, Ford, Nissan, Hyundai - and a rash of domestic players makes up the rest of the pack. The sheer number of players may not come as a surprise considering China is the largest car market in the world - in 2010, 13.8million units were sold. The Indian car market is roughly a seventh of the Chinese one, and at last count, there were a little over 20 major players - mostly multinational - in the race with close to 40brands. The difference: the top three are not global leaders by any yardstick. There’s no Toyota, GM,VW - the global one-two-three - at the top of the India grid. Rather, there’s Maruti, the affiliate of world No 9 Suzuki at pole position, followed by Hyundai Motors (No 8 globally) and home-grown manufacturer Tata Motors in third spot. What’s more, the top three rather remarkably control almost 70% of the Indian car market, with the Detroit giants GM and Ford (globally No 2 and No 4, respectively) relegated to 6th and 7th position, Toyota at No 5 and VW at No 8. Much of this, of course, has to do with Suzuki’s early entry into India, via a joint venture with the government in the early 1980s when the competition at that time was sparse and outdated. Ford, GM, Toyota and Honda began Indian operations over a decade ago but have met with limited success thanks largely to their top-down approach of first launching cars at the higher end of the market where margins are fatter but volumes slim. A situation in which global leaders are alsorans with market shares in single digits is unimaginable in most other parts of the world. But that situation may not hold for too long back home. For, even though growth in car sales fell by15% in July to touch a two-year low, global auto majors are convinced about prospects in the long haul. Abdul Majeed, auto practice leader at Price water-house Coopers (PwC) expects the Indian car market to more than double to five million from 2.2 million units in five years.
ON THE GROWTH PATH:
In contrast, growth in developed markets is subdued. In the Euro zone, growth in car sales is expected to decline by 2-4% in 2011. The saviour for global Big Auto, as in the case in many other industrial categories, is of course the much-touted cluster of developing economies. The July skid not with standing, car sales are still expected to grow by 10-12% in India in 2011. “The growth story is intact. This(drop in July) is just a temporary blip. All car manufacturers need to expand operations,” says Sandeep Singh, deputy managing director, Toyota Kirloskar Motor, the joint venture in which the Japanese giant holds 89%.“If inflation is tamed, interest rates will come down. There is a huge opportunity and we have to move fast with our expansion plans,” he adds. The world’s largest carmaker by sales, Toyota, intends to boost its share of emerging markets from40% in 2010 to 50% in two to three years on the back of growing sales of fuel-efficient small vehicles. That ina line sums up the name of the game for the auto majors: ramp up capacities at the entry levels with affordable and snazzier models. “The Indian market is much bigger for us now than in the past,” says Hiroshi Nakagawa, managing director of Toyota Kirloskar Motor. The renewed focus on the mass market -more than half of the cars sold in India are compacts and hatchbacks - promises to change the name of the game. VW, one of the newer entrants into India - it began operations in 2007 - has achieved what many of its global counter-parts could not do in more than a decade: a market share of 3% in four years. It has done so by launching competitively-priced models – the Vento that was priced lower than the hitherto best selling Honda City in the mid-size segment; and the Polo premium hatchback is VW's cheapest car in India. Emboldened, VW is now thinking big - very big. Says John Chacko, Volkswagen Group’s chief representative and president and MD, Volkswagen India: “We want to be amongst the top three in India by 2018. Globally we rank third with a market share of 11%. I am sure with a market share of 11% in India we can be amongst the top three.” Chacko acknowledges that it’s going to be a “long journey,” and that he needs to get “a whole range of products, the right products and achieve high localisation levels” if he has to get into the top three. If VW does climb five places, it will also mean that one of the leaders, if not all three, will have to face up to a significant erosion in share. For, it’s not only VW that can be spotted in their rear view mirrors. Detroit giants GM and Ford are also threatening to get their act together. What's more, Nissan (ranked No 6in the world) and Renault have joined the race. The likes of Peugeot-Citroen, Kia, Chrysler and Proton are all itching to get foot to pedal, and finalising their India blueprints.“There is demand but we are all constrained by capacity,” says Michael Boneham, managing director, Ford India. Perhaps no longer. A week ago the US auto giant announced that it would invest close to $1 billion in a second factory in Sanand in Gujarat to assemble vehicles and make engines. If Ford has decided to bite the bullet after 13 years in the country, it may have something to do with some newfound success. Struggling with just a 1.5% market share till a year ago, Ford bounced back smartly to more than double its share to 3.54%.The success ingredient: The small car Figo, which accounts for three fourths of all cars Ford sold in July. More variants of the Figo are in the works even as the Detroit major recently launched the premium sedan Fiesta. But Ford is clear that that compacts is where the action is -it will launch eight new such products in 12-18 months.
ROOM FOR ALL:
Slowdown or no slowdown, the slugfest promises to be fascinating. After all, if the top three control over two thirds of the market, the top five lord over 85% of it; add No 6, 7 & 8 and the share shoots up to close to 95%. In effect, this means that there are at least a dozen players slugging it out for a thin sliver of the pie. Is it going to be worth their while?“That more than 12 players are fighting for less than 5% market share is not going to kill anybody. There is room for every car maker,” maintains Neeraj Garg, head of VW’s passenger car business in India. Industry experts feel that the top two -Maruti Suzuki and Hyundai - are unlikely to be displaced in the next four to five years.“There is no killer product in the pipeline to sway the market otherwise,” says VG Ramakrishnan, senior director, automotive, at Frost and Sullivan, a management consulting firm. Maruti with a solid 41% over-all market share and a near complete portfolio may be in an even sweeter spot.
“Maruti has the scale, new products and is currently the most efficient manufacturer in India,” says Hormazd Sorabjee, editor of Autocar India. “At least for the next8-10 years, Maruti will continue to be the dominant player as India is a lead market for Suzuki, much more important than Japan,” he adds. Indeed, Suzuki’s ability to transfer R&D quickly will go a long way in helping Maruti stay on top. “Our ability to put models in the market that reflect customer needs in shorter periods at a low cost of ownership will make the difference,” says RC Bhargava, chairman, Maruti Suzuki. “We may lose market share over a 10-year period but our volumes will grow,” he adds. Over the past decade, Maruti’s share has slipped by 14 percentage points from 55% in 2000.Maruti’s sales have fallen by more than a fourth in July, with the discontinuation of popular hatchback Swift contributing to that fall. But with a new version of that model set for launch, India’s largest car maker may have a new ace up its sleeve. Another masterstroke from Maruti could well prove to be a plan to re-introduce its one-time bread-and-butter entry-level brand, the Maruti 800. Analysts point out that the new look 800 will comply with the new emission norms, and will be priced lower than the Alto - taking it closer into the territory of the world’s cheapest car, the Tata Nano. Hyundai too is planning to launch a car below its current base model, the Santro. Tata Motors may well be the most vulnerable of the top three, what with the Nano not yet delivering huge volumes. Sales in July fell to3,250 from a peak of10,000 a few months ago. Overall, Tata’s share in passenger cars has dropped from18% in fiscal 2007 to 12.66% in the April-June 2011 quarter.“Of the top three, Tata Motors seems to be on the weakest wicket. The Nano has not given them the required market share,” says Maruti’s Bhargava. “The passenger vehicle segment of Tata Motors is under pressure as the lead time for product development is too long,” adds Autocar’s Sorabjee. Tata Motors officials were unavailable for comment. The biggest beneficiaries are the new kids on the block. In the first six months of2011, points out VW’s Garg, the top three have grown volumes by 14%, 21% and 9% respectively, but their market shares have dropped cumulatively by 3.8%. In the same peri-od Toyota, VW and Ford have collec-tively gained 4.4%, adds Garg. “This has to happen in any emerging mar-ket where a market leader starts losing share as the number of players in-crease,” he explains. VW for its part has more than doubled its market share from 1.6% a year ago. As a group, VW is present with entire range of brands: there’s Audi at the luxury end; and Skoda, which extends from the mass segment (with the Fabia) to the luxury (the Superb).Between January and June, the three brands grew by 500% with sales of nearly 38,000 units, says Chacko. Toyota has been present in India since 1999 when it launched utility vehicle Qualis. Over the years, it captured consumer mind space with bestselling brands like the Corolla, Innova, Camry and Fortuner. Yet these brands addressed only 12% of the Indian car bazaar. The more re-cent launches of the mid-size sedan Etios and small car Liva have changed the name of the game-now Toyota can pull in close to half of the country’s potential car buyers. That’s a significant shift for Toyota, from the higher end to the mass market. “We have entered a new segment with new customers and aspirations,” acknowledges Toyota Kirloskar’s Singh. “Etios will now be our flagship product as it was developed and adapted for India. And for the next two years our focus will be on the compact segment (where the Liva is positioned),” adds Singh. Toyota in-tends to increase dealerships from 159to 175 by the end of2011, 40-45% of them in tier-II markets.
SMALL PACKAGES:
The advantage for brands like VW and Toyota is that they are distinctly more aspirational than a Maruti. The flip side, however, is that nobody knows - and straddles - the small car segment as well as Maruti does. And that’s the segment that every carmaker with mass market ambitions is attempting to crack. GM is therewith the Beat, which is now in diesel too, and Ford with Figo (petrol and diesel). And Honda Siel, a distant No10, is banking on the Brio compact to score some gains. So where does that leave a Johnnie-come-lately like a Renault? The French auto major dissolved a joint venture with the Mahindras last April, and started independent operations this May. The market share game is not priority for Renault at this point in time; establishing the brand over the next 12months is. To that end Renault recently launched the Fluence sedan in the Rs 15 lakh price bracket. “Brand Renault is not well established in India. With the launch of the Fluence we are showing Renault’s capabilities in design, styling, innovation, technology and value-for-money products,” says Marc Nassif, MD, Renault India. Renault plans to follow up with the launch of the SUV Koleos this year; in 2012, it will launch mass market cars, including a hatchback, the affordable SUV Duster and another yet unnamed car. “In two years, we will launch mass market products and have 100 dealership outlets in 70cities, so 2013 will be the first fully functional year and we expect to sell100,000 cars by 2014,” explains Nassif. That's when he says Renault will reach a critical mass in the Indian market. “Phase two of our operations will take us to a goal of reaching a 5%market share,” adds Nassif. In South America and Brazil, the company got a 5% share in 8-10 years. Renault may be a late entrant but its advantage may well be that it won’t have to traverse as long learning curve as the likes of the Detroit majors, Honda and Toyota had to. Meantime, other global majors like Peugeot-Citroen are looking to kick-start their India operations.“New entrants have outlined an aggressive strategy with several new launches lined up in the next three to four years. Cost and product differentiation will hold the key,” says PwC’s Majeed. It’s going to be an holds-barred skirmish for share in one of the world’s fastest growing markets. Who ends up on the victorious side is a matter of conjecture as of now, but there’s little doubt about one big winner in this battle: the spoilt-for-choice Indian consumer.
Diesel cars may lose edge as Government considers dual pricing
The government recently indicated that dual pricing of diesel may be introduced to remove the subsidy enjoyed by car owners, provoking a strong reaction from carmakers.
Finance Minister Pranab Mukherjee said that passenger cars were consuming about 15 % of the diesel supplied in the country.
To which car manufacturers gave a sharp reaction as any change would hit badly an already slow auto market. Domestic car sales dipped 10% Year on Year in July, the worst performance since the 7% Decline in Jan 2009.
The government gives a subsidy of 6.08 Rs/litre on diesel. According to ministry’s estimates, the fuel subsidy bill for the current year will be Rs12,20,000 crore.
Diesel cars account for 35% of all passenger vehicle sold in India. Sales have risen in the last few years primarily because diesel is 40% cheaper than petrol and 25% more efficient.
As of now the companies are trying to increase the production of diesel cars to meet the demand, and removal of subsidies would mean further impact on the sector.
SALES BOOSTING STRATEGIES
Carmakers: Fiat, Mercedes, BMW and Ford open cafes, lounges to boost sales in India and promote their brands.
Italian car-maker FIAT is desperate to check the sales that is declining in India. Fiat plans to open Cafes in New-Delhi and Pune in tie-up with Lavazza.
The plan is to serve the customers in India with Italian food like Pasta and other delicacies in an environment having Fiat cars displayed. The automobile company has undertaken a unique style to reach till their customers and advertise their car models.
Fiat is not the only car maker in the food industry. Mercedes-Benz has already opened its lounge in New Delhi and displaying it sports car model.
Along with Mercedes, its primary rival in India: BMW which already has its BMW café in Delhi international airport, plans to open its second lounge in Mumbai.
Usually, people visit cafés to work on their laptop. They use Wi-fi for this. Hence BMW is targeting to reach its customers in this way. Even if people can’t afford to buy a BMW car, they can at least get familiar with the luxury brand.
Even Ford India is planning to open up its Fiesta Cafés temporarily at malls in New-Delhi, Mumbai and Bangalore. They believe that now it is the perfect time to experiment this strategy, because customers not only look at the features, but also now-a-days the design and looks are also given top most priority.
Fiat is considering this strategy as very important. Because last year the overall car sales in India went up by 30% and only Fiat was the company who had a downfall of nearly 15%.
The company barely managed to cross the 1000 unit mark in the month of July. Although, Maruti’s sales dropped considerably in the last month they were way ahead of what the Italian automaker managed. FIAT managed to sell 925 units of the Punto and just 175 units of the Linea sedan. FIAT knows, they are losing out market share to the heavyweights like Maruti Suzuki and Tata Motors among others.
In an attempt to revive the sales of their products, FIAT has tied-up with Lavazza to open cafes and lounges across the country. The first cafes will come up in Delhi and Pune by which the company hopes to build the brand. The cafes will have the current FIAT line-up of cars on display where potential customers will get a taste of the Italian car brand. The cafes will also serve pastas and other Italian cuisine. There will also be a cultural space where movies will be screened along with theater and a display of artwork.
SALES IMPACTED DUE TO INTEREST RATES HIKE
The impact of hike n interest rates is very huge on car sales. Car companies lashed out at RBI’s interest rates hike that has brought the car sales to a negative zone. The car makers like Maruti, Hyundai, Honda and M%M entitled this decline in sales as “DEPRESSING”. According to them even counter steps like offering discounts can neither help to boost the sales nor attract the customers to go for new vehicles.
The interest rate hike by RBI has brought a tremendous downtrodden. Car finance rates have gone up by nearly 2% since RBI began its hawkish stance and currently hover around 12.5%. Sales growth slipped from 26% in January this year to 1.6% in June due to increase in interest rates. Since 70% of the car sales were dependent upon financing and car loans. The growth in Interest rates will considerably increase the expenditure of a common man who is paying the car installments. The rate hike has also affected the EMI’s and Home loans too. Thus the amount saved for the purchase of a car, is getting used for the repayment of home-loans.
MARUTI FORCED TO CUT PRODUCTION DUE TO DEMAND SLOW-DOWN
An inventory pile up at its dealers has forced Maruti Suzuki to cut the production for this month as it fights with demand slow down in the sector largely by high interest rates and increasing fuel prices.
Barring SWIFT and D’ZIRE the sales of other high volume cars such as ALTO WagonR Ritz etc has reduced. Maruti sells more than half the cars in the country. As some f the cars are not moving fast due to sluggishness in demand. So they have tweaked the production schedule to keep their inventory at normal level.
Car sales declined 16% in July. Their first drop in 2 and a half yrs due to fuel prices and interest rates which has made the customers to postpone their purchases, the RBI has increased the rates 11 times last year. In India 70% cars are financed. Due to market conditions Maruti produced 17000 lesser cars last month.
The company plans to revive its demand in the festive season from September 1st. They feel the current slowdown is short-term and is expected to revive further.
TWO WHEELER EVALUATION
Hero Moto Corp:
Hero Moto Corp. the world’s no. 1 two wheeler company has posted growth of 14.81% in the month of July 2011 compared to July 2010. The company has sold 4,91,036 units of two wheeler in the month of July 2011 compared to 4,27,686 units of two wheeler sold in the month of July 2010. This is the first time the company has sold less than five lakh units after four consecutive months of more than 5 lakh units sales. The company attributed lower sales to Haridwar plant shut down for few days. On the month on month basis the sales is down by 4.14%.
Anil Dua, senior vice-president (marketing & sales), Hero Moto Corp, said: “This start has clearly set an upbeat tone for the new company. We are confident that Hero Moto Corp will now make rapid strides to further strengthen its leadership by continuing to launch innovative products and following a customer-centric approach. We are looking to ride our current buoyancy into the festive season by launching our new identity, innovative products and engaging campaigns.”
He also added “We are happy to cross the 2-million mark in just four months of this fiscal. The good numbers of July have come about despite constraints on supply from our Haridwar plant due to ‘Kawar’ movement in the region during the month,”
It seems that the company will achieve its 6.15 million units sales target for this year but the growth rate will come down due to high base effect of last year.
Bajaj Auto:
Country’s second largest two wheeler maker, Bajaj Auto has reported growth of 13.69% in the month of July 2011. The company has sold 3,18,095 units of motorcycle in the month of July 2011 compared to 2,79,381 units in the month of July 2010. This is by far company’s highest ever monthly sales for July month. On the month on month basis sales is down by 1.47%.
The company is aiming to sale 4.6 million units in this financial year with 4.1 million units of motorcycle. The company is aiming to sale over a million units of Pulsars and 1.7 million units of Discover in the financial year 2011-12. The company will also re-launch Boxer in the month of August which will contribute close to 300,000 units for the financial year 2011-12. Adding to this the company is planning to do 3,50,000 units of motorcycle and 50,000 three wheelers in the month of August 2011.
TVS Motors:
TVS Motors has posted growth of 14.45% in the month of July 2011. The company has sold 1,86,672 units in the month of July 2011 compared to 1,63,106 units sold in the month of July 2010. Total sales stood in the month of July 2011 up by 14.29% compared. On the month on basis the company’s sales is up by 4.29
TVS Motors motorcycle sale is stagnating now. The company is pushing well on moped front. The company is also bullish on export front and exploring new opportunities to expand its export market. The company has set goal of selling 2.4 million units in this financial year.
HMSI:
India’s largest scooter manufacturing company Honda Motorcycle & Scooter India Ltd reported sales growth of 10.07% in the month of July 2011. The company reported sales of 1,52,382 units in the month of July 2011 compared to 1,38,445 units in the July 2010. On month on month basis the company’s sales is up by 2.31%. The company sold 1,48,937 units in the month of June 2011.
As expected sales is increasing on the month on month basis now. Scooter number for HMSI has started growing at 20% rate from this month which suggests improvement in capacity constraint. It will matter of time that it will cross TVS Motors and will have tag of third largest manufacturer of India. Beside this company is planning to expand it’s capacity to 4 million units by mid 2013.
Yamaha India:
Yamaha India has reported sales growth of 28.49% in the month of July 2011 compared to July 2010. Total sales stood at 38,197 units in the month of July 2011 compared to 29,728 units last year in the same period. The company reported month on month basis sales is up by 4.38%.
“We are pleased with the consistent sales growth that we’ve been witnessing month-on-month this year… We are also very upbeat about the upcoming festive season which will further propel our sales,” India Yamaha Motor Chief Executive Officer and MD Hiroyuki Suzuki said.
The company now plans to reach out to customers in Tier II and III cities and is expanding its sales and service network, he added.
The company is aiming to sell 5,00,000 units in this financial year with 3,50,000 units of domestic sales and 1,50,000 units of export. The company is also planning to launch scooter in this year.
Suzuki Motorcycle:
Suzuki Motorcycle India reported massive growth of 46.16% in the month of July 2011 compared to July 2010. The company’s total sales stood at 27,088 units in the month of July 2011 compared to 18,533 units in the month of July 2010. The company has reported 6.78 % growth in sales.
Commenting on July month sales SMIPL Vice-President (Sales and Marketing) Atul Gupta said “We have received a very good response from the market to all our products. The growing customer satisfaction among present owners of Suzuki products has led to a positive word-of-mouth in the market.’’
Suzuki Motorcycle is the fastest growing two wheeler company in India now.
Mahindra Two Wheelers:
Two wheeler company Mahindra two wheeler reported growth of 8.14% in the month of July 2011 compared to July 2010. Total sales stood at 13,012 units in the month of July 2011 compared to 12,033 units in the month of July 2010. The company is going to re-launch Sattalio within few months. Month on Month basis the company’s sales is up by 10.76%. Commenting on July month sale Mr. Anoop Mathur, President – Two Wheeler Sector and Member of the Group Executive Board said “We are witnessing higher growth momentum on the back of increasing consumer preference for our scooter brands in many key markets across the country.”
As said earlier the company will not be able to report any higher growth rate in upcoming month as the demand for scooter is slowing down compared to previous month. Moreover market leader HMSI has increased Activa production which is also taking some unit sales of Mahindra two wheelers. On month on month basis the company is growing fast.
SUMMARY
The Indian two wheeler industry’s growth rate is now coming down and the impact of so many negative factors like fuel price hike, increase in prices of two wheelers etc is clearly visible. The July 2011 month has seen sales of more than 1.22 million units up by 14.61% compared to 1.07 million units sold in July 2010. The period April 2011 to July 2011 has witnessed growth of 17.44% over the same period last year. More than 4.90 million units of two wheelers sold during the period of April 2011 to July 2011 compared to 4.17 million units in the same period last year.
Hero Moto Corp the market leader is continuously posting double digit growth with robust sales each month. It has done 2.02 million units sales in the current financial year. Bajaj Auto the second largest manufacturer of two wheelers has sold 1.28 million units in the current financial year.
TVS Motors has sold more than 0.71 million units whereas HMSI sales stood at 0.58 million units during April 2011 to July 2011 period. Yamaha India, Suzuki Motorcycle and Mahindra two wheelers sold 0.15 million, 0.11 million and 0.04 million units respectively during the period of April 2011 to July 2011. Going ahead we will continuously have double digit growth in two wheeler industry despite fuel price hike and rising price of two wheelers as there are several new product launches in pipeline for next 6 month. But the growth rate will come down in upcoming months.
CONCLUSION
The Society of Indian Automobile Manufacturers (SIAM) has revealed the total car and sales figures for the month of July. As expected car sales have dipped considerably while bike sales continue to grow. As per the SIAM’s report, car sales have dropped by 15.76 per cent to 1,33,747 units in July. 1,58,767 cars were sold in July 2010.
Two wheeler sales continued to grow despite increased fuel and bank interest rates in July. Sales increased by 12.61 per cent to 10,56,906 units last month from the previous July’s sales of 9,38,514 units. Motorcycle sales registered an increase of 10.51 per cent to 7,85,278 units from the 7,10,621 units sold in the corresponding period last year.
Commercial vehicle sales which are an indicator of the economy’s performance also saw a boost. After sales of 64,241 units in July, commercial vehicle sales registered a 23.7 per cent hike.
SIAM added total vehicle sales in India during the month of July stood at 13,48,753 units marking a growth of 8.99 per cent. Although this growth is a positive development, this is comparatively very low considering the sales growth seen during last year.
Carmakers are bracing themselves for another sales dip. Although there has been no official word from any carmaker about their sales being affected by the recent economic crisis in the US. While the IT industry being expected to suffer the bulk of the impact, car sales might see a fall again. The recent price reductions and discount offers can be considered as move by carmakers to maintain sales.
Two wheeler sales continued to grow despite increased fuel and bank interest rates in July. Sales increased by 12.61 per cent to 10,56,906 units last month from the previous July’s sales of 9,38,514 units. Motorcycle sales registered an increase of 10.51 per cent to 7,85,278 units from the 7,10,621 units sold in the corresponding period last year.
Commercial vehicle sales which are an indicator of the economy’s performance also saw a boost. After sales of 64,241 units in July, commercial vehicle sales registered a 23.7 per cent hike.
SIAM added total vehicle sales in India during the month of July stood at 13,48,753 units marking a growth of 8.99 per cent. Although this growth is a positive development, this is comparatively very low considering the sales growth seen during last year.
Carmakers are bracing themselves for another sales dip. Although there has been no official word from any carmaker about their sales being affected by the recent economic crisis in the US. While the IT industry being expected to suffer the bulk of the impact, car sales might see a fall again. The recent price reductions and discount offers can be considered as move by carmakers to maintain sales.
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