During November 2009, Indian auto industry witnessed a strong base effect (November 2008 plagued by financial crisis) translating into robust growth for most manufacturers on a yoy basis. Sequentially, the performance was a mixed bag with Hero Honda, Maruti and Tata Motors registering marginal growth while TVS and M&M experiencing a fall in volumes. Passenger car volumes registered a strong growth on yearly and sequential basis with Maruti experiencing the growth of 61.6% yoy and Tata Motors registering a surge of 47.7% yoy (Indigo registered the highest sales ever in a single month). With Xylo continuing to witness strong demand UV volumes for M&M more than doubled to 16,212 units. In the two wheeler segment Hero Honda outperformed TVS motors with the growth of 31.8% yoy.
Maruti: Strong growth in domestic and export market
Maruti reported a 60% yoy rise in domestic volumes, driven by strong growth in C, A2 and A3 categories. A2 segment which accounts for over 70% of the total passenger car volumes reported a robust growth of 60% yoy backed by continued success of Ritz, A-star and Swift. The segment reported 9% growth sequentially (highest amongst all passenger car segments for Maruti). UV volumes dropped 58% yoy while C category (Omni and Versa) witnessed a jump of 116% yoy. Continued strong demand for the DZire model translated in to 46% yoy surge in A3 category. The recent launch of Sx4 acted as catalyst for the growth in the segment. Exports of Maruti were up by 129% yoy, led by astounding success of A-Star in the European and American markets where the demand for fuel efficient vehicles has being strong. Exports have registered a sequential fall of 17% mom probably due to the release of the scrappage policy and cash for clunkers program in Europe and USA respectively.
Mahindra & Mahindra: very strong base effect drives the growth on yoy basis
Mahindra & Mahindra (M&M) registered 100% yoy growth in total automotive domestic volumes during November 2009. The growth was led by the UV segment which a growth of 116% yoy driven by success of Xylo and new variant of Scorpio. Volumes of three wheelers and LCVs increased 79% and 158% respectively. Logan volumes continue to fall with 7% yoy decline to 279 in November 2009 from 300 for November 2008. Exports registered a growth of 42% yoy to 1,200 units. Tractors have registered a sequential fall of 35% mom in the domestic market.
Tata Motors: CV sales recover in domestic market with strong export growth
Total volumes of the company rose by 65.5% yoy to 54,108 vehicles. The growth was led by continued recovery in CV sales but was accentuated by a strong base effect. LCV volumes jumped 60.9% yoy, while M&HCV volumes rose 115.9% yoy. However volumes for LCV registered a fall on a sequential basis of 9.3% mom. Passenger car volumes increased 47.7% yoy and 5.3% mom. The growth in the passenger car segment was led by sales of Nano and Indigo range. The Indigo recorded its highest ever sales of 5,963 vehicles, a growth of 71.5% yoy driven by wide acceptance of newly launched Manza. Indica volumes were up marginally by 1% yoy. Exports for the company registered a growth of 93% yoy (first time in 15 months).
Two-wheelers: Hero Honda continues to shine
Amongst the two wheelers, Hero Honda registered a growth of 32% yoy in the total volumes to 381,378 units. TVS Motors sales were higher by 22.8% yoy led by 42.6% yoy jump in scooter & moped segment. Scooter and Moped segment accounts for over 50% of the total volumes for TVS Motors. However, motorcycle volumes fell marginally by 0.4% yoy.
Outlook: Economic stability a key factor for growth
The celerity of growth in automobile sector has been led by strong bounce back in the economy. GDP for the quarter ended September 2009 rose by 7.9% (fastest in a year and half). Further, finance availability has improved substantially. However, the growth may not be sustainable, with expectations of interest rate hardening in the near term. Base effect might continue to keep the growth numbers in the higher range, but absolute numbers would be of higher importance. Impact of poor monsoons might further impact volumes. With commodity prices heading northwards, auto manufacturers are witnessing margin pressures and are planning to hike prices. Toyota has announced a price hike of 1.5% to 2% effective from January 2010. This may impact the volumes on the negative side as all the pent up demand might have already being absorbed in the festive season.