Autos: Pre-festive Stocking Boosts: Sales
September numbers: Sales strong as stocking
increases prior to festive season: Volume growth
remained strong with the Car segment and MHCV
segment growing by 29% and 34% yoy in 2QF11.
Volumes remained strong on the back of pre-festive
stocking as well as buying in the CV space ahead of the
application of changes to emission legislation. In autos
we like Tata Motors, Mahindra and Ashok Leyland.
Tata Motors: Raises prices and MHCV growth
healthy at 28% YoY, LCV growth tapers down: Given
raw material pressures and emission change legislation
applicable from October 1st 2010, Tata motors and M&M
announced price hikes from 1 to 3% of selling price.
Tata’s MHCVs posted 28% YoY growth and 12% MoM.
Given 3% price hike and pre emission change buying in
September the October CV sales may come off
sequentially. Increasing competition from M&M, high
base and production constraints at Uttrakhand facility
resulted in tepid LCV sales growth for Tata. Tata cars
(ex-Nano) and the UV segment reported 13% and 40%
YoY growth. Nano volumes came at 5k, down 32% MoM,
constraints at the suppliers end seemed to be the key
reason for decline.
Maruti domestic sales grow at 33% yoy, up 3% MoM:
Maruti total sales were strong at 108K units, up 30%
YoY. Domestic wholesales stood at 95Kunits while retail
sales were at 88k; entry level models like Alto K10,
Wagon R and Eeco were the key growth drivers.
Hyundai India saw 14% growth in domestic sales and
launched a new variant of its largest selling car, namely,
the i10, in the last week of September.
Hero Honda at 433k units, up 8% YoY, numbers were
below expectations and we believe heavy rains in
Uttrakhand may have affected production at Pantnagar
facility.
M&M: Recent Launches Drive Growth, Tractors post tepid growth: The UV sales posted stable 10% growth but recent
launches like the Maxximo, Gio, and the revamped Logan all posted strong growth and drove automotive sales growth up to
24% YoY. Tractor posted a muted 3% YoY and 30% MoM, our full year growth estimates imply 14% growth for the remaining
year thus we don’t see any downside risks. M&M launched also entered the motorcycle space with two launches, one in the
110cc range and the other in the 300cc range, and aims to be a significant player in the two wheeler industry in the coming
years. M&M two wheeler sales came at 16,500 units for the month.
TVS Motor reported its highest ever sales in September The motorcycle segment did particularly well, up 34% YoY and
22% MoM, with Jive being launched pan-India. The scooter and the moped segment continued to at a healthy run-rate of 40K
and 60K units and TVS reported a overall growth of 30% YoY.
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