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Why December Looked Good For Most Automakers

Holiday season coupled with low base add to automakers’ fortune in December. 

A sales assistant shows a car to a customer. (Image: Photographer: Graham Crouch/Bloomberg)
A sales assistant shows a car to a customer. (Image: Photographer: Graham Crouch/Bloomberg)

Most automakers sold more cars in December as sales rose on year-end discounts and a low base as demand had slowed down in the same month last year after demonetisation.

India’s largest passenger vehicle maker Maruti Suzuki Ltd.’s sales rose for the twelfth straight month, driven by demand for its compact cars. Domestic sales rose 12.1 percent to 1.19 lakh units while exports fell 6.2 percent to 10,780 units.

Tata Motors Ltd., country’s largest commercial vehicle maker too reported a strong sales performance in December, an increase of 52 percent, driven by higher demand compared to that in December 2016. A steady ramp-up in production of Bharat Stage-IV vehicles and continued rise in sales in consumption-driven sectors led the growth, according to the company's statement.

In the two-wheelers space, Eicher Motors, TVS Motor Company, and Bajaj Auto reported a growth in monthly sales.

Here’s how automakers fared in December.

Why December Looked Good For Most Automakers

Passenger Vehicles

Maruti Suzuki sold 10.3 percent more cars at a little over 1.3 lakh in December, according to its exchange filing. Sales of compact cars like the Swift, the Dzire and the Baleno rose 23.4 percent while utility vehicle sales, including the Ertiga, the Gypsy and the Vitara Brezza, rose 19.9 percent over last year.

Second-placed Hyundai Motor India Ltd. clocked a 10 percent increase, as India’s second-largest carmaker sold 62,899 units, it said in a media statement. Domestic sales remained nearly flat at 40,158 units. Exports rose 32.9 percent to 22,741 units.

Tata Motors’ passenger vehicle sales performance was at 14,180 units, 31 percent up over last year. This was the company's highest ever December sales in this segment since 2012, led by a strong performance of Tiago, Tigor, Hexa, and Nexon.

India’s largest utility vehicle maker Mahindra and Mahindra Ltd.’s volumes declined 7 percent as demand for its SUVs and MUVs declined 9 percent. It sold 22 percent more cars and vans.

Commercial Vehicles

M&M's commercial vehicle sales grew 24 percent to 17,542 units from the year-ago month. Volumes of medium and heavy trucks surged 151 percent to 1,193 units, according to an exchange filing. It sold 20 percent more light commercial vehicle with a capacity of less than 3.5 tonnes at 15,749 units. The volumes of bigger LCVs rose 13 percent to 600 units.

Three-wheeler sales rose 13 percent to 3,894 units, with exports increasing 8 percent to 2,221 units.

A Tata Motors Ltd. truck makes its way through traffic on a road in Bangalore, India. (Photographer: Namas Bhojani/Bloomberg)
A Tata Motors Ltd. truck makes its way through traffic on a road in Bangalore, India. (Photographer: Namas Bhojani/Bloomberg)

Tata Motors’ commercial vehicles segment sold 40,447 units during the month in India, 62 percent higher than that a year ago. The automaker sold 54,627 vehicles in total.

The commercial sector has shown good recovery after the headwinds and regulatory challenges of last year.
Tata Motors press statement. 

Bajaj Auto Ltd.'s sales jumped 30 percent in December on a year-on-year basis on the back of record sales by its commercial vehicles segment, as exports continued to outperform for the company. Sale of commercial vehicles rose 187 percent to 63,785 units compared to that a year ago.

Hinduja Group's flagship Ashok Leyland Ltd.’s sales of medium and heavy commercial vehicles drove the growth momentum for the company. Sales rose for the seventh straight month in December, as the truck maker's sales increased 79 percent to 19,253 units from the year-ago period, it said in an exchange filing.

Two Wheelers

India's largest two-wheeler manufacturer Hero Motocorp Ltd. reported a 43 percent increase in sales to 4.72 lakh units in December, from the corresponding month in the previous year.

We are now entering the last quarter of this fiscal with a strong focus on the premium segment and scooters and we are confident of sustaining our growth momentum.
Pawan Munjal, Chairman, Hero MotoCorp said in a media statement.

TVS Motor Company Ltd.’s sales increased 39 percent to 2.56 lakh units in December year-on-year. Two-wheeler sales rose 37.9 percent to 2.47 lakh units, driven by a 63.7 percent jump in motorcycle volumes at 95,281 units, according to its media statement. Scooter sales grew 50.5 percent to 83,640 units year-on-year. The company sold 72.1 percent more three-wheelers at 9,279 units.

Eicher Motors Ltd.’s sales increased 17 percent in December, led by higher sales of its motorcycles with engine capacity of up to 350cc. The Royal Enfield maker’s sales of models with higher engine capacity fell 20 percent to 3,699 units in the same period.

An Eicher Motors Ltd. Royal Enfield Desert Storm motorcycle stands on display at the company’s Royal Enfield flagship dealership in Gurgaon, India (Photographer: Prashanth Vishwanathan/Bloomberg)  
An Eicher Motors Ltd. Royal Enfield Desert Storm motorcycle stands on display at the company’s Royal Enfield flagship dealership in Gurgaon, India (Photographer: Prashanth Vishwanathan/Bloomberg)  

Bajaj Auto’s sale of motorcycles grew 13 percent last month. While motorcycle sales within India grew only 6 percent, two-wheeler exports rose 20 percent.

Tractors

Farm equipment maker Escorts Ltd.’s sales increased 13.1 percent increase, driven by demand after a good monsoon. It sold 3,476 units in the domestic market, an increase of 14.2 percent. Exports contracted 9.7 percent to 130 units, according to its exchange filing.