JP Morgan - India Automobile Sales Tracker Mar'11: Unit sales growth moderates, discounts rise for PVs

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'Milestones' - India Automobile
Sales Tracker
Mar'11: Unit sales growth moderates, discounts rise
for PVs


• Sales trends: Two wheeler sales grew +19% yoy vs. +27% YTD,
passenger car sales grew +24% yoy vs. 24% YTD and commercial
vehicle sales were up +18% vs. +31% YTD. Sector growth rates
appear to be moderating, off a demanding base. Interestingly,
discounting trends picked up for the passenger car segment over the
month.
• Key data points on market share: Over FY11, the market leaders
ceded share to competition: Maruti (-40bp) in the passenger car
segment, Tata Motors (-190bp) in the commercial vehicle segment,
and Hero Honda (-350bp) in the motorbike segment. However, Maruti
and Hero Honda have gained incremental market share mom. While
Maruti offered attractive year end schemes, Hero Honda has been able
to ramp up production over the quarter.
• Global luxury OEMs report healthy growth: Luxury brands BMW,
Audi and Mercedes-Benz saw worldwide sales increase by 15%, 14%
& 8%, respectively, y/y in March 2011. Sales growth continues to be
driven by Chinese and US markets.
• Sector growth outlook by SIAM: This year, SIAM expects growth
rate to moderate to 12-15% for the overall industry. They expect the
growth rate in the PV segment to moderate to 16-18%, two-wheeler
segment to moderate to 12-14% and commercial vehicle segment to
14-16%.
• The auto sector (+7% mom) performed broadly in line with the broader
Sensex (+7% mom) during the month. While sector growth rates
appear to be moderating, rising input cost pressures and higher
competitive intensity will likely weigh on profitability.