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January sales remain positive…
The first month of CY11 was expected to be marred by price hikes
incurred by all major OEMs as December’s unanticipated volume growth
was understood as sales that were more in anticipation of the January
price hikes. However, the momentum in growth has continued with 19.8%
YoY jump and a nominal ~0.8% MoM increase (on a high base) at ~1.51
million units. The growth in January 2011 sales in spite of across the
board price hikes in the automobile sector could be an early indicator of
pricing power in the industry and growing income strength with changing
buying trends towards automobile purchases. The volume growth of the
industry has been ~28.0% with passenger car (PV) segment growing
24.5%, commercial vehicle (CV) segment growing the fastest at 34.7%
and the largest segment, two-wheelers growing at 28.2% on a YTD basis.
The demand scene would be closely monitored in the wake of strong
headwinds on the costs front for both OEMs and the end customer.
Kizashi roars into premium sedan space, kicks off product launches in CY11..
As expected, the automobile industry got an entry into CY11 with the
launch of Kizashi by PV market leader Maruti Suzuki in the premium sedan
space. We expect this to be a precursor to the strong pipeline of new
products that are expected to be seen this year. The industry is looking at
advanced technology to bring out more fuel efficient cars and also
alternates, which would lead to a reduction in customer owning costs.
The industry would likely witness ~20-25 new model launches in this year
across various segments.
Industry has one question in mind, how long would input prices rise?
The steel, aluminium and plastic prices continued to increase in the range
of 22-53% YoY. This was mainly as demand has continued to be strong in
the automotive segment from EMs and some developed markets coupled
with supply related shortages due to cutbacks and halts in production due
to natural calamities. The price of natural rubber, an essential commodity
for tyre production, seems to be unrelenting as it has crossed | 235
(~55% higher YoY). This can mainly be attributed to production
constraints in Kerala coupled with a certain degree of cartelisation in
domestic markets. Even globally, Thailand had witnessed floods leading
to a decline in production. Overall, we do not expect to see any
immediate softening in the commodity cycle.
Industry Outlook
The outlook towards volume growth of the sector is positive. We expect
the CAGR volume growth to range from 18-23% in FY10-12E. This would
be driven by rising per capita income with increasing levels of economic
activity along with the demographical advantage of a young consumption
hungry population. We believe in the structural nature of this automobile
demand that is similar to what was witnessed in China post CY03.
However, confirmation of the same would arrive in the strength of the
volume numbers, going forward. The major spoilers remain the steep
price increases in various commodities and unfavourable currency
volatility, which could cause a serious concern to the whole industry as
profitability could see an erosion. Lastly, on the demand side, any steep
hike in interest rates could act as a demand dampener deferring sales and
slowing down the demand power train.
Latest events/news
• The country's largest car maker Maruti Suzuki launched its luxury
sedan Kizashi. The car would be available in two variants, manual
transmission priced at | 16.5 lakh and automatic transmission
version at | 17.5 lakh. The fuel efficiency is expected to be at 12.5
kilometre per litre (kmpl) for the CVT and 12.5 kmpl for the manual
transmission
• Honda Siel will expand its network to small cities and towns and
tie up with state-run and regional banks to ensure its upcoming
compact car Honda Brio does not repeat the failure of the Honda
Jazz hatchback. The Brio is expected be launched in September
with a price tag of less than | 5,00,000. Honda has already grown
its network to 150 outlets in 72 cities now from 120 outlets
• Tata Motors has launched the Tata Prima Construck range in India.
The range comprises the Tata Prima 3128.K and Tata Prima
2528.K tippers, which have been specially developed for road
construction, irrigation projects and off-highway deep mining
activities. The Prima Construck range will be available in the price
range of | 33 lakh to | 40 lakh (ex-showroom Delhi)
• TVS Motors plans to ramp up its manufacturing facility at Hosur in
Tamil Nadu as part of meeting huge demand for its scooter Wego,
which sells around 12,000-15,000 units per month. The company
is expected to ramp up capacity from 12,000 units to 20,000 units
per month at the facility
• The French car maker Renault expects India to gain 20 places to
become its 11th largest market by 2013. The company plans to
launch six locally produced by then in the Indian market. The
company has set a target to sell over three million vehicles in 2013
globally, compared to 2.6 million units in 2010
• Bajaj Auto has reaffirmed the view of staying away from the
rapidly growing scooter market, which witnessed a rise of 46.6%
YTD at ~1.7 million units. The company has decided to stay
focused on the motorcycle segment and to gain market share
across segments.
Two-three wheeler industry
The two wheeler industry has seen robust growth throughout the year
with a stupendous 20.3% MoM jump and 28.2%YTD with market leader
Hero Honda along with Bajaj Auto posting double digit growth numbers
even on a higher base. TVS Motors also witnessed a positive set of
numbers with ~29% YoY growth. Scooter sales growth rates continued to
remain the highest in the two-wheeler segment though all other segments
are also expected to grow with the onset of the marriage season across
India in CY11.
Market share movement
According to data released by the Society of Indian Automobile
Manufacturers (SIAM), the market share of two and three-wheeler players
is as below for January 2010.
Hero Honda Motors (HERHON)
• Hero Honda Motors has seen positive volume growth at the start
of CY11 due to the continuing demand for the largest selling
refurbished Splendor, Passion seeing no signs of a slowdown.
The company has continued to maintain its market share with a
marginal improvement of 20 bps and 30 bps in the motorcycle
and total two-wheeler segment (Refer Exhibit 1, 3). Hero Honda
declared its Q3FY11 results below consensus expectations on the
margins front on EBITDA and PAT due to higher input and SG&A
expenses
• The company registered volumes of 4,66,524 units with 19.7%
YoY jump on a large base. However, on an MoM basis, we saw a
decline of ~7% mainly attributable to the strong buying pre-price
hikes in January 2011
• The scooter segment has continued to gain market share with
volume of 36,338 units, a growth of 92.1% YoY and 73.1% YTD.
The Pleasure has been accepted well and this has reflected in the
growing market share as Hero Honda has gained 220 bps to
16.2% while market leader HMSI lost 790 bps (Refer Exhibit 4)
• The company has established plans of entering the exports
market with a definitive plan. This entails a | 1000-crore expansion
plan as part of the same. The exports, at present, are a mere ~2%
of total sales. We expect it to see a strong boost with the launch of
the Splendor and Passion in hot export markets like Africa and
South East Asia
Bajaj Auto (BAAUTO)
• Bajaj Auto has seen a positive bounce back post the slowdown in
previous months. It would be watched with huge interest with the
4 million volume target set for FY11 looking quite tough to
achieve. On the market share front, it remains at 26.9% in the
motorcycle segment (Refer Exhibit 1, 3)
• Total volumes for the month were at 3,13,583 units, a strong
17.9% YoY growth and 13.3% jump on a MoM basis driven by
stronger exports and higher three-wheeler sales
• The motorcycle segment continues to be dominated through the
flagship brands of Pulsar and Discover (accounting for ~70% of
total sales) while volumes have grown 18.3% YoY. However, on
the domestic front, motorcycle volumes grew only 7.2% YoY
while exports jumped 55.6% in motorcycles. Exports volume
contribution to motorcycle was at 30.3%, higher than the YTD
contribution of 29.6%
• The three-wheeler segment witnessed growth of ~15% (YoY,
MoM) driven by stronger domestic market growth of ~20.9% in
the three-wheeler segment and moderate 10.9% growth in the
export market. The slower export offtake would be watched
closely as its contribution to volumes is ~54% on a YTD basis
TVS Motors (TVSSUZ)
• TVS Motors saw a moderate month in terms of volumes with a
strong performance in the motorcycle segment marred by
weakness in the mopeds segment
• Motorcycle volumes grew to 67,721 units, a 10.3% MoM and
23.8% YoY jump reflecting the acceptance of the recently
launched Jive and Wego in the consumer segment. Scooter sales
have seen moderation with a 2.6% decline at 40,736 units. Strong
YoY growth has led to a market share increase of 50 bps at 21.7%
(Refer Exhibit 4).
• The mopeds segment was the real dampener with volumes
witnessing a slowdown of 18.2% MoM at 53,268 units due to
slowing seasonal demand in the southern region
• Exports have continued the momentum gathered from the
previous month with a 2.6% MoM increase at 19,498 units. This
was mainly due to higher sales from the South East Asian regions,
which had experienced a decline in sales in earlier periods owing
to seasonality
Four-wheeler industry
Commercial vehicles growth continues to be strongest on a YoY basis as
it grew YTD by 34.7%. With a stronger budgetary push we could witness
a pickup in the infra and capital goods-linked activities in CY11, in turn,
helping on the volumes visibility front for the segment. The passenger car
market continues to be in a buzz with Maruti launching Kizashi as a
premium segment sedan (| 16.5 lakh). With a host of new launches in
CY11 we can expect end customers to have a host of offerings to choose
from. Input prices remain an overhang with rising prices. However, with
OEMs having some degree of leverage on pricing, as demand continues
to grow margins could see a subdued decline if raw materials continue to
remain firm.
Market share movement
According to SIAM, the market share for passenger vehicles (PV) and
CVs in January 2011 has been as follows.
Maruti Suzuki India (MARUTI)
• Maruti Suzuki India (MSIL) came back to normalised levels of
volume growth after the five-day maintenance shutdown in
December. Overall growth remains buoyant with the management
also cautiously optimistic on the structural nature of passenger car
(PV) demand and expects India to be entering a similar auto sales
growth trajectory as China (post 2003) post FY12.
• Domestic sales again surpassed the 1 lakh volume mark with
1,00,230 units (23.8% YoY, 12.4% MoM jump). It continued to
maintain overall market share at above 45% levels (January 2011).
The competitive nature of the A2 segment and PV in general has
not impacted MSIL’s volumes as anticipated earlier. On the
contrary, the market share and volumes have outperformed peers.
Competitive pressures have taken a toll on Hyundai significantly (a
170 bps decline in market share MoM) and marginally on Tata
Motors (30 bps YoY)
• The strongest volume drivers remains the A2 segment (Alto,
Swift, Wagon-R, Zen, A-star, Ritz) (72,479 units, 23.8% YoY, 12.4%
MoM jump) and C segment (Omni, Versa and Eeco) (13,945 units,
27.7% YoY, 2.9% MoM increase). The reinvigorated Alto family
post the launch of the K-10 has seen the strongest month with
volumes of ~33,100 units. In the A2 segment, Ritz has started to
show stronger volumes at ~6,000 odd units and dealers have
shown strong interest in the same as a substitute to the Swift
family due to its high waiting period. In the C-segment, Eeco has
recorded volumes of ~6000 odd units along with Omni, which
continues to be at ~8000 odd units
• Export segment volumes continued to remain sluggish with the
slowdown in European sales and MSIL’s increased focus on the
domestic market. The exports were at 9,321 units, lower by 36%
YoY. The sedate MoM decline could reflect the normalisation of
export volumes at 9,000 odd levels
Tata Motors (TELCO)
• Tata Motors’ sales saw the strongest monthly volumes ever with
the strong bounce back in the PV segment driven by higher sales
in the Indica and Indigo family along with up-tick in volumes in
Tata Nano
• On a segmental level, CV demand was moderate with M&HCV
volumes sales slipping 5.4% MoM. However, we expect to see a
stronger pick-up in FY12 with stronger push through the Union
Budget towards construction and infrastructure activities. The LCV
segment remains the strongest volume contributor on an overall
basis for the month at 34.8%. Domestic volumes grew to 23,776
units, a 17.4% YoY increase and small decline of 2.9% MoM as
Ace continues to face capacity constraints and increased
competition from M&M’s LCV portfolio
• Passenger vehicle (inclusive of UVs) sales for the month continued
the strong momentum from the December 2010 sales with overall
volumes at 30,212 units (15.1% YoY and 53.3% MoM jump). PV
sales were boosted by Indica and Indigo sales (8,456 units and
10,591 units respectively with 78.8% MoM jump and 61.6% QoQ
jump respectively). Tata Nano has continued on the resurgence
track post the disappointment in volumes in November 2010 with
volumes of 6,703 units (up ~16% MoM). The management
remains confident on witnessing volumes of Nano of ~10,000 odd
units, going forward
• Exports have been slow with a decline of 14.8% MoM and
contribution towards total sales dropping to 6.6% as compared to
7.4% of YTD in FY11
Mahindra and Mahindra (MAHMAH)
• Mahindra and Mahindra (M&M) continues to witness volume
growth in all segments from UV to tractors. The company
continues to see market share maintenance in the UVs segment
along with higher realisations in the tractor segment (rural
segment) where the company continues to command ~43.3%
market share
• The utility vehicle segment inclusive of four-wheeler pickups grew
to 26,281 units, 29.3% YoY jump and 5.7% MoM increase. This
was on strong growth of Gio and Maximmo pickups that led to a
market share (~25% in sub-one tonne segment) of ~32.5% in the
complete LCV segment, up from 28% till October 2010. The
management expects to see ~1000 units/month sales for Gio and
~5500 units/month for Maximmo. The SsangYong deal is nearing
completion and would result in launch of Korean model –Korando
by the turn of the new fiscal in FY12. SsangYong sales for January
2010 showed improvement at 7,579 units (up 71% YoY)
• Exports have shown a strong rebound with a 39.6% MoM jump as
the company is witnessing demand growth in regions of South
East Asia and Africa
• The farm equipment segment (FES) has been marked by a growth
of 25.5% MoM at 20,499 units. The domestic market continues to
witness growth in both the low HP (>15 HP and <30 HP) through
“Yuvraj” brand for first time buyers and the high- HP (>40 HP)
segment though “Arjun” brand. Domestic growth was at 28.4%
MoM at 19,430 units. On the exports side, volumes have seen a
marginal dip at 1,069 units (10.8% MoM decline). The higher
impetus from the government is expected to push forward rural
sales of tractors in the coming fiscal as rising food inflation and
stagnant farm productivity has been a concern.
Ashok Leyland (ASHLEY)
• Ashok Leyland has witnessed a flattish kind of growth. This was
also common with the Tata Motors CV growth reflecting a
moderation in pick-up with rising fuel costs and higher interest
rates. Overall volumes were at 7,711 units, which reflected a
marginal 1.9% MoM increase
• The M&HCV passenger segment has seen slowdown YoY with a
decline of 16.8% MoM at 2,096 units mainly as this segment has
been dependant on the existing JNNURM scheme, which has
been nearly exhausted. Going forward, it would witness moderate
growth. Ashok Leyland has continued to do well in the goods
segment this month post the launch of U-trucks. The MHCV goods
segment has seen a 12.1% MoM growth at 5,564 units, thereby
providing comfort with commercial order booking expected to
increase
• Exports have been negative on an MoM basis with a 28.2%
decline as sales reached 831 units and export contribution to total
sales declined to 10.8% from 12.0% on a YTD basis
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
January sales remain positive…
The first month of CY11 was expected to be marred by price hikes
incurred by all major OEMs as December’s unanticipated volume growth
was understood as sales that were more in anticipation of the January
price hikes. However, the momentum in growth has continued with 19.8%
YoY jump and a nominal ~0.8% MoM increase (on a high base) at ~1.51
million units. The growth in January 2011 sales in spite of across the
board price hikes in the automobile sector could be an early indicator of
pricing power in the industry and growing income strength with changing
buying trends towards automobile purchases. The volume growth of the
industry has been ~28.0% with passenger car (PV) segment growing
24.5%, commercial vehicle (CV) segment growing the fastest at 34.7%
and the largest segment, two-wheelers growing at 28.2% on a YTD basis.
The demand scene would be closely monitored in the wake of strong
headwinds on the costs front for both OEMs and the end customer.
Kizashi roars into premium sedan space, kicks off product launches in CY11..
As expected, the automobile industry got an entry into CY11 with the
launch of Kizashi by PV market leader Maruti Suzuki in the premium sedan
space. We expect this to be a precursor to the strong pipeline of new
products that are expected to be seen this year. The industry is looking at
advanced technology to bring out more fuel efficient cars and also
alternates, which would lead to a reduction in customer owning costs.
The industry would likely witness ~20-25 new model launches in this year
across various segments.
Industry has one question in mind, how long would input prices rise?
The steel, aluminium and plastic prices continued to increase in the range
of 22-53% YoY. This was mainly as demand has continued to be strong in
the automotive segment from EMs and some developed markets coupled
with supply related shortages due to cutbacks and halts in production due
to natural calamities. The price of natural rubber, an essential commodity
for tyre production, seems to be unrelenting as it has crossed | 235
(~55% higher YoY). This can mainly be attributed to production
constraints in Kerala coupled with a certain degree of cartelisation in
domestic markets. Even globally, Thailand had witnessed floods leading
to a decline in production. Overall, we do not expect to see any
immediate softening in the commodity cycle.
Industry Outlook
The outlook towards volume growth of the sector is positive. We expect
the CAGR volume growth to range from 18-23% in FY10-12E. This would
be driven by rising per capita income with increasing levels of economic
activity along with the demographical advantage of a young consumption
hungry population. We believe in the structural nature of this automobile
demand that is similar to what was witnessed in China post CY03.
However, confirmation of the same would arrive in the strength of the
volume numbers, going forward. The major spoilers remain the steep
price increases in various commodities and unfavourable currency
volatility, which could cause a serious concern to the whole industry as
profitability could see an erosion. Lastly, on the demand side, any steep
hike in interest rates could act as a demand dampener deferring sales and
slowing down the demand power train.
Latest events/news
• The country's largest car maker Maruti Suzuki launched its luxury
sedan Kizashi. The car would be available in two variants, manual
transmission priced at | 16.5 lakh and automatic transmission
version at | 17.5 lakh. The fuel efficiency is expected to be at 12.5
kilometre per litre (kmpl) for the CVT and 12.5 kmpl for the manual
transmission
• Honda Siel will expand its network to small cities and towns and
tie up with state-run and regional banks to ensure its upcoming
compact car Honda Brio does not repeat the failure of the Honda
Jazz hatchback. The Brio is expected be launched in September
with a price tag of less than | 5,00,000. Honda has already grown
its network to 150 outlets in 72 cities now from 120 outlets
• Tata Motors has launched the Tata Prima Construck range in India.
The range comprises the Tata Prima 3128.K and Tata Prima
2528.K tippers, which have been specially developed for road
construction, irrigation projects and off-highway deep mining
activities. The Prima Construck range will be available in the price
range of | 33 lakh to | 40 lakh (ex-showroom Delhi)
• TVS Motors plans to ramp up its manufacturing facility at Hosur in
Tamil Nadu as part of meeting huge demand for its scooter Wego,
which sells around 12,000-15,000 units per month. The company
is expected to ramp up capacity from 12,000 units to 20,000 units
per month at the facility
• The French car maker Renault expects India to gain 20 places to
become its 11th largest market by 2013. The company plans to
launch six locally produced by then in the Indian market. The
company has set a target to sell over three million vehicles in 2013
globally, compared to 2.6 million units in 2010
• Bajaj Auto has reaffirmed the view of staying away from the
rapidly growing scooter market, which witnessed a rise of 46.6%
YTD at ~1.7 million units. The company has decided to stay
focused on the motorcycle segment and to gain market share
across segments.
Two-three wheeler industry
The two wheeler industry has seen robust growth throughout the year
with a stupendous 20.3% MoM jump and 28.2%YTD with market leader
Hero Honda along with Bajaj Auto posting double digit growth numbers
even on a higher base. TVS Motors also witnessed a positive set of
numbers with ~29% YoY growth. Scooter sales growth rates continued to
remain the highest in the two-wheeler segment though all other segments
are also expected to grow with the onset of the marriage season across
India in CY11.
Market share movement
According to data released by the Society of Indian Automobile
Manufacturers (SIAM), the market share of two and three-wheeler players
is as below for January 2010.
Hero Honda Motors (HERHON)
• Hero Honda Motors has seen positive volume growth at the start
of CY11 due to the continuing demand for the largest selling
refurbished Splendor, Passion seeing no signs of a slowdown.
The company has continued to maintain its market share with a
marginal improvement of 20 bps and 30 bps in the motorcycle
and total two-wheeler segment (Refer Exhibit 1, 3). Hero Honda
declared its Q3FY11 results below consensus expectations on the
margins front on EBITDA and PAT due to higher input and SG&A
expenses
• The company registered volumes of 4,66,524 units with 19.7%
YoY jump on a large base. However, on an MoM basis, we saw a
decline of ~7% mainly attributable to the strong buying pre-price
hikes in January 2011
• The scooter segment has continued to gain market share with
volume of 36,338 units, a growth of 92.1% YoY and 73.1% YTD.
The Pleasure has been accepted well and this has reflected in the
growing market share as Hero Honda has gained 220 bps to
16.2% while market leader HMSI lost 790 bps (Refer Exhibit 4)
• The company has established plans of entering the exports
market with a definitive plan. This entails a | 1000-crore expansion
plan as part of the same. The exports, at present, are a mere ~2%
of total sales. We expect it to see a strong boost with the launch of
the Splendor and Passion in hot export markets like Africa and
South East Asia
Bajaj Auto (BAAUTO)
• Bajaj Auto has seen a positive bounce back post the slowdown in
previous months. It would be watched with huge interest with the
4 million volume target set for FY11 looking quite tough to
achieve. On the market share front, it remains at 26.9% in the
motorcycle segment (Refer Exhibit 1, 3)
• Total volumes for the month were at 3,13,583 units, a strong
17.9% YoY growth and 13.3% jump on a MoM basis driven by
stronger exports and higher three-wheeler sales
• The motorcycle segment continues to be dominated through the
flagship brands of Pulsar and Discover (accounting for ~70% of
total sales) while volumes have grown 18.3% YoY. However, on
the domestic front, motorcycle volumes grew only 7.2% YoY
while exports jumped 55.6% in motorcycles. Exports volume
contribution to motorcycle was at 30.3%, higher than the YTD
contribution of 29.6%
• The three-wheeler segment witnessed growth of ~15% (YoY,
MoM) driven by stronger domestic market growth of ~20.9% in
the three-wheeler segment and moderate 10.9% growth in the
export market. The slower export offtake would be watched
closely as its contribution to volumes is ~54% on a YTD basis
TVS Motors (TVSSUZ)
• TVS Motors saw a moderate month in terms of volumes with a
strong performance in the motorcycle segment marred by
weakness in the mopeds segment
• Motorcycle volumes grew to 67,721 units, a 10.3% MoM and
23.8% YoY jump reflecting the acceptance of the recently
launched Jive and Wego in the consumer segment. Scooter sales
have seen moderation with a 2.6% decline at 40,736 units. Strong
YoY growth has led to a market share increase of 50 bps at 21.7%
(Refer Exhibit 4).
• The mopeds segment was the real dampener with volumes
witnessing a slowdown of 18.2% MoM at 53,268 units due to
slowing seasonal demand in the southern region
• Exports have continued the momentum gathered from the
previous month with a 2.6% MoM increase at 19,498 units. This
was mainly due to higher sales from the South East Asian regions,
which had experienced a decline in sales in earlier periods owing
to seasonality
Four-wheeler industry
Commercial vehicles growth continues to be strongest on a YoY basis as
it grew YTD by 34.7%. With a stronger budgetary push we could witness
a pickup in the infra and capital goods-linked activities in CY11, in turn,
helping on the volumes visibility front for the segment. The passenger car
market continues to be in a buzz with Maruti launching Kizashi as a
premium segment sedan (| 16.5 lakh). With a host of new launches in
CY11 we can expect end customers to have a host of offerings to choose
from. Input prices remain an overhang with rising prices. However, with
OEMs having some degree of leverage on pricing, as demand continues
to grow margins could see a subdued decline if raw materials continue to
remain firm.
Market share movement
According to SIAM, the market share for passenger vehicles (PV) and
CVs in January 2011 has been as follows.
Maruti Suzuki India (MARUTI)
• Maruti Suzuki India (MSIL) came back to normalised levels of
volume growth after the five-day maintenance shutdown in
December. Overall growth remains buoyant with the management
also cautiously optimistic on the structural nature of passenger car
(PV) demand and expects India to be entering a similar auto sales
growth trajectory as China (post 2003) post FY12.
• Domestic sales again surpassed the 1 lakh volume mark with
1,00,230 units (23.8% YoY, 12.4% MoM jump). It continued to
maintain overall market share at above 45% levels (January 2011).
The competitive nature of the A2 segment and PV in general has
not impacted MSIL’s volumes as anticipated earlier. On the
contrary, the market share and volumes have outperformed peers.
Competitive pressures have taken a toll on Hyundai significantly (a
170 bps decline in market share MoM) and marginally on Tata
Motors (30 bps YoY)
• The strongest volume drivers remains the A2 segment (Alto,
Swift, Wagon-R, Zen, A-star, Ritz) (72,479 units, 23.8% YoY, 12.4%
MoM jump) and C segment (Omni, Versa and Eeco) (13,945 units,
27.7% YoY, 2.9% MoM increase). The reinvigorated Alto family
post the launch of the K-10 has seen the strongest month with
volumes of ~33,100 units. In the A2 segment, Ritz has started to
show stronger volumes at ~6,000 odd units and dealers have
shown strong interest in the same as a substitute to the Swift
family due to its high waiting period. In the C-segment, Eeco has
recorded volumes of ~6000 odd units along with Omni, which
continues to be at ~8000 odd units
• Export segment volumes continued to remain sluggish with the
slowdown in European sales and MSIL’s increased focus on the
domestic market. The exports were at 9,321 units, lower by 36%
YoY. The sedate MoM decline could reflect the normalisation of
export volumes at 9,000 odd levels
Tata Motors (TELCO)
• Tata Motors’ sales saw the strongest monthly volumes ever with
the strong bounce back in the PV segment driven by higher sales
in the Indica and Indigo family along with up-tick in volumes in
Tata Nano
• On a segmental level, CV demand was moderate with M&HCV
volumes sales slipping 5.4% MoM. However, we expect to see a
stronger pick-up in FY12 with stronger push through the Union
Budget towards construction and infrastructure activities. The LCV
segment remains the strongest volume contributor on an overall
basis for the month at 34.8%. Domestic volumes grew to 23,776
units, a 17.4% YoY increase and small decline of 2.9% MoM as
Ace continues to face capacity constraints and increased
competition from M&M’s LCV portfolio
• Passenger vehicle (inclusive of UVs) sales for the month continued
the strong momentum from the December 2010 sales with overall
volumes at 30,212 units (15.1% YoY and 53.3% MoM jump). PV
sales were boosted by Indica and Indigo sales (8,456 units and
10,591 units respectively with 78.8% MoM jump and 61.6% QoQ
jump respectively). Tata Nano has continued on the resurgence
track post the disappointment in volumes in November 2010 with
volumes of 6,703 units (up ~16% MoM). The management
remains confident on witnessing volumes of Nano of ~10,000 odd
units, going forward
• Exports have been slow with a decline of 14.8% MoM and
contribution towards total sales dropping to 6.6% as compared to
7.4% of YTD in FY11
Mahindra and Mahindra (MAHMAH)
• Mahindra and Mahindra (M&M) continues to witness volume
growth in all segments from UV to tractors. The company
continues to see market share maintenance in the UVs segment
along with higher realisations in the tractor segment (rural
segment) where the company continues to command ~43.3%
market share
• The utility vehicle segment inclusive of four-wheeler pickups grew
to 26,281 units, 29.3% YoY jump and 5.7% MoM increase. This
was on strong growth of Gio and Maximmo pickups that led to a
market share (~25% in sub-one tonne segment) of ~32.5% in the
complete LCV segment, up from 28% till October 2010. The
management expects to see ~1000 units/month sales for Gio and
~5500 units/month for Maximmo. The SsangYong deal is nearing
completion and would result in launch of Korean model –Korando
by the turn of the new fiscal in FY12. SsangYong sales for January
2010 showed improvement at 7,579 units (up 71% YoY)
• Exports have shown a strong rebound with a 39.6% MoM jump as
the company is witnessing demand growth in regions of South
East Asia and Africa
• The farm equipment segment (FES) has been marked by a growth
of 25.5% MoM at 20,499 units. The domestic market continues to
witness growth in both the low HP (>15 HP and <30 HP) through
“Yuvraj” brand for first time buyers and the high- HP (>40 HP)
segment though “Arjun” brand. Domestic growth was at 28.4%
MoM at 19,430 units. On the exports side, volumes have seen a
marginal dip at 1,069 units (10.8% MoM decline). The higher
impetus from the government is expected to push forward rural
sales of tractors in the coming fiscal as rising food inflation and
stagnant farm productivity has been a concern.
Ashok Leyland (ASHLEY)
• Ashok Leyland has witnessed a flattish kind of growth. This was
also common with the Tata Motors CV growth reflecting a
moderation in pick-up with rising fuel costs and higher interest
rates. Overall volumes were at 7,711 units, which reflected a
marginal 1.9% MoM increase
• The M&HCV passenger segment has seen slowdown YoY with a
decline of 16.8% MoM at 2,096 units mainly as this segment has
been dependant on the existing JNNURM scheme, which has
been nearly exhausted. Going forward, it would witness moderate
growth. Ashok Leyland has continued to do well in the goods
segment this month post the launch of U-trucks. The MHCV goods
segment has seen a 12.1% MoM growth at 5,564 units, thereby
providing comfort with commercial order booking expected to
increase
• Exports have been negative on an MoM basis with a 28.2%
decline as sales reached 831 units and export contribution to total
sales declined to 10.8% from 12.0% on a YTD basis
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