A sales assistant, right, shows a vehicle to a customer at a dealership in Faridabad, Haryana, India (Photographer: Graham Crouch/Bloomberg)  

Low Base Powers Strong Auto Sales In November

Most Indian automakers reported strong sales growth in November due to a low base in the same month last year when the auto industry was hit by tepid demand after the government’s demonetisation drive.

November is usually a weak month for auto manufacturers as it comes after the festive season in India when the bulk of buying takes place. This year growth was broad-based with most segments seeing a rise in sales. Auto dealers that BloombergQuint spoke to said they had expected sales to stabilise during the month.

Sales of India’s largest carmaker Maruti Suzuki Ltd. rose for the eleventh straight month driven by demand for its compact cars like the Ignis, Baleno and Celerio. The country's largest commercial vehicle manufacturer Tata Motors Ltd. also reported higher sales as demand rose.

Two-wheeler sales also improved albeit at a slower pace than cars and trucks.

"We are happy to be in a positive growth phase for November 2017, which is usually a lean period post the festive season," said Rajan Wadhera, president of the automotive sector for Mahindra and Mahindra Ltd., in a media statement. He added that the growth momentum is expected to continue further.

Here's how automakers fared in November 2017.

Passenger Vehicles

Maruti Suzuki sold 1.54 lakh vehicles in November, a 14 percent increase from the corresponding month last year, the company said in a media statement. Domestic sales went up 15 percent to 1.45 lakh units.

Sales of compact cars like Swift, Baleno and Ignis rose 32.4 percent while utility vehicle sales, includes the Ertiga, S-Cross and Vitara Brezza, went up 34 percent over last year. Sales of Alto and WagonR however continued to fall, while the mid-sedan Ciaz also saw a 26 percent decline.

Tata Motors’ passenger vehicles sales rose 35 percent over last year to 17,157 units driven by strong demand for its new compact SUV Nexon. The company ramped up production at its Ranjangaon facility, rolling out 10,000 units of Nexon. The introduction of new vehicles and strong customer initiatives had helped sales, the automaker said.

The launch of Tata Nexon. (Photographer: Dhiraj Singh/Bloomberg) 
The launch of Tata Nexon. (Photographer: Dhiraj Singh/Bloomberg) 

M&M reported a 21 percent increase in passenger vehicle sales over last year at 16,030 units. Growth was driven by a 37 percent rise in the sales of cars and vans. Utility vehicles sales also went up 20 percent.

In the unlisted space, the second largest carmaker Hyundai Motor India Ltd. saw a 10 percent rise in sales buoyed by strength in rural markets, it said in a statement. Honda Cars India Ltd. too reported a 19 percent growth to 11,819 units.

Although November volumes this year have shown improvement over last year, the market is still to recover fully from the GST related changes affecting consumers at large,
Yochiro Ueno, CEO, Honda Cars India Ltd.

Commercial Vehicles

Tata Motors reported a 72 percent growth in commercial vehicle sales over last year at 35,307 units. The automaker saw increased demand due to the ramp up of production of its new range of Bharat-Stage IV compliant vehicles. The “sustained” increase in acceptance of the new emission norms led to a 88 percent jump in the sales of medium and heavy commercial truck, it said in a statement.

The commercial sector has bounced back strongly after the initial disruption in the market, surrounding demonetization and the BS4 transition that largely affected the transport industry last year.
Tata Motors Media Statement

Sales of light commercial vehicles rose 76 percent to 3,984 units. Pickup segment sales for Tata Motors, which includes the newly launched Xenon Yodha, also increased 53 percent.

Hinduja Group's flagship Ashok Leyland Ltd. reported a 51 percent increase in total sales over last year at 14,460 units. Sales of medium and heavy commercial vehicle rose 54 percent, while light commercial vehicle sales increased 44 percent year-on-year.

M&M's commercial vehicle sales rose 22 percent over last year to 15,554 units. Medium and heavy commercial vehicle sales more than doubled to 792 units, while light commercial vehicle sales went up 19.4 percent.

Bajaj Auto was the surprise package reporting its highest ever commercial vehicle sales in November.

Domestic CV sales for Bajaj increased 157 percent to 37,887 units, while exports went up 41 percent.

Two Wheelers

Eicher Motors, maker of Royal Enfield motorcyles, saw a 22 percent rise in total sales at 70,126 units. Higher engine capacity motorcycles continued to disappoint with a 12 percent decline. Models with engines up to 350cc rose 26 percent.

(Photographer: Dhiraj Singh/Bloomberg)  
(Photographer: Dhiraj Singh/Bloomberg)  

Bajaj Auto's two wheeler sales increased 11 percent to 2.64 lakh units. This was lower than what analysts had expected.

India's largest two-wheeler manufacturer Hero Motocorp Ltd. reported a 26 percent growth in sales over last year at 6.05 lakh units. This is the seventh consecutive month that it reported sales of more than six lakh, driven by the iconic motorcyles Splendor, Passion, Deluxe and scooters, it said in a media statement.

In the unlisted space, Suzuki Motorcycles reported a 37.1 percent rise in sales aided by demand for its premium scooters and the newly launched Intruder 150 cruiser.

Tractors

Tractor sales for M&M's farm equipment sector went up 32 percent to 22,754 units on the back of a strong monsoon season, it said in a media statement. The company exports the positive demand sentiment to continue.

Escorts Ltd.’s sales rose 6.5 percent year-on-year in November to 4,941 units.

Exports

Outbound shipments were a mixed bag for the Indian auto industry in November

  • Tata Motors: Exports fell 12 percent to 4,297 units.
  • Maruti Suzuki: Exports increased 0.8 percent to 9,300 units.
  • Eicher: Exports increased 60 percent to 2,350 units.
  • M&M: Exports fell 6 percent to 2,531 units.
  • TVS: Exports surged 43.8 percent to 32,892 units.
  • Escorts: Exports went up 64.8 percent to 178 units.
  • Bajaj Auto: Exports climbed 27 percent to 1.46 lakh units.
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