Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
FY11 ends positively! FY12 headwinds galore…
Volume growth continues to top up a robust year…
March volume growth has topped a robust FY11 due to higher year-end
purchases from various retail and corporate buyers amid steeper
discounts as dealers looked at inventory clearance. The growth has been
robust at 19.5% YoY and 4.8% MoM increase (on a higher base) at ~1.58
million units reaching 1.66 million units. The growth in sales in CY11
despite across the board price hikes in the automobile sector is a strong
indicator of pricing power in the industry and the growing income
strength among the growing middle class. The March 2011 MoM sales
growth has confirmed this fact to a certain degree. However, we believe
that further recurring price hikes in FY12 would definitely hinder higher
ended 13-16% demand growth expectations. The volume growth of the
industry in FY11 has been ~26.6% with the passenger car (PV) segment
growing 24.0%, commercial vehicle (CV) segment growing the fastest at
30.3% with the two–wheeler segment growing at 26.8%. The demand
scene would be a key deliverable to be watched for industry growth along
with input prices, which could deflate profitability.
Manufacturing inflation raises risk of further interest rate tightening…
The latest inflation figures of ~9% were reflective of the existence of high
manufacturing inflation both from the demand and supply side. The
strong demand has provided higher pricing power to OEMs leading to rise
in end product prices. On the supply side, higher demand pull has fuelled
the input prices and labour costs rises pushing manufacturing inflation
even higher. This rise in inflation from the manufacturing side could lead
to potential increase of interest rates of ~25-50 bps in the coming period
leading to negative impact on rate sensitive like automobiles.
Commodity prices still in the up-cycle
Commodity prices led by steel, aluminium and plastics prices have
increased ~3-15% on a YoY basis. The price of natural rubber has seen
the steepest hike and has kept on rising in this fiscal touching a peak of |
235 (~58% higher YoY). Our in-house auto RM index is also up ~13% on
a YoY basis (Refer Exhibit 16). According to our earlier expectations,
global commodity prices have stiffened post the sudden dip in the
aftermath of Japanese disaster. This commodity cycle up-move continues
to remain the toughest challenge for the industry.
Industry outlook
The outlook towards the volume growth of the sector is positive. We
expect volume growth to range between 13% and 16% in FY12E. On the
index performance basis, the BSE Auto index has outperformed the BSE
Sensex with YoY return of 25.1% as compared to 9.7% during the same
period. The demand side has remained robust in FY11. Though we
believe demand is structural, immediate concerns for the sector like
commodity hikes and unfavourable currency volatility could cause serious
concern to the whole industry as profitability could see erosion. Among
our ICICIdirect.com auto-coverage, we remain bullish on frontline OEM
stocks like Tata Motors, Maruti Suzuki. In the ancillary coverage, we find
favourable valuation and business growth perspectives in Bharat Forge
and Exide Industries.
Latest Events / News
• US based company Ford has revealed that the new version of its
mid-size sedan Fiesta will be the first among eight products that it
will be launching by 2015. The new Fiesta is expected to be priced
above | 8 lakh. The sedan will be produced at its Chennai facility,
which has a production capacity of 2 lakh cars on a three shift
basis and 2.5 lakh engines every year
• Japanese auto major Nissan may launch two new vehicles in India
by 2012. According to reports, a global sedan will be in the market
while another vehicle, which is expected to compete with Toyota's
Innova, will be launched during this year. The company also
expects to export 1.1 lakh units of Micra to Europe, Africa and
West Asia by October 2011
• Maharashtra is planning to withdraw its February notification that
restricts the refund of value-added tax (VAT) only on vehicles sold
to consumers in the state and not those sold to the distribution
and sales arms of car makers. In February, the state said those
automakers who are getting a refund of VAT that they pay to
component makers, will not be eligible to claim refund on VAT if
the ultimate sale of vehicles takes place out of the state. This
would help in maintaining the state as an active manufacturing
hub, which has seen serious competition from the likes of Tamil
Nadu, Gujarat and Uttarakhand
• The Indian automotive sector, which has become an important
attraction for many foreign players in the luxury segment, has not
been left behind. The latest luxury car Aston Martin One 77 at | 20
crore has become the costliest car not only in India but also in the
world. The company has launched eight models in the market at
price ranging from | 1.35 to | 20 crore
• The country's largest carmaker Maruti Suzuki India has again
increased the prices of its vehicles across all models by up to |
9,000 to offset rising input costs. It is the second time in 2011 that
the firm is increasing prices of its vehicles. In January, the
company had hiked prices by up to | 8,000 across models, except
its newly launched compact car Alto K10
• Bajaj Auto, India’s second largest two-wheeler maker, launched
the Discover 125 to fill the missing gap between Discover 100 and
Discover 150 to complete the entire range. Bajaj Discover-125 is
priced at | 45,500 (ex-showroom price in New Delhi) and hopes to
sell about 40,000 units per month of the Discover new 125 cc bike
Two–three wheeler industry
The two wheeler industry has continued on the growth trend and
completed FY11 with a strong 18.7% MoM jump and 26.8% YTD with
market leader Hero Honda posting record volumes above 5 lakh units
even on an increasing base. TVS Motors also witnessed a rebound post
January 2011 with ~31.0% YoY growth. Scooter sales growth rates
continued to remain the highest in the two-wheeler segment. However,
the turn of the new fiscal would be an important indicator towards the
demand scenario.
Market share movement
According to the data released by the Society of Indian Automobile
Manufacturers (SIAM), the domestic market share of two and threewheeler
players is as below for March 2010.
Hero Honda Motors (HERHON)
• Hero Honda Motors, the market leader in the two-wheeler
segment, finished the year with a bang as it touched lifetime high
sales volumes. HHL has continued to maintain its domestic market
share with a marginal improvement of 10 bps each (MoM) in the
motorcycle and total two-wheeler segment (Refer Exhibit: 1, 3)
• The company registered volumes of 515,852 units with a strong
24.4% YoY and a 9.3% MoM rise as year-end purchases were
enhanced with higher discounts at the dealers end with clearance
of old inventory
• The scooter segment continued to gain market share with volume
of 37,972 units, a growth of 56.0% YoY and 68.6% YoY for FY11.
The company has increased its focus on the scooter segment.
This has got reflected as it gained 220 bps YoY in the domestic
market to 16.3% while market leader HMSI lost 750 bps
Bajaj Auto (BAAUTO)
• Bajaj Auto has seen a tepid ending to FY11 with overall sales of
3.8 million units as sales were hampered by transit issues towards
export sales. On the domestic front, its market share remains at
26.8% in the motorcycle segment (Refer Exhibit: 1, 3)
• Total volumes for the month were at 307,738 units. This was a
sedate 12.2% YoY growth. However, it slipped 5.9% MoM as
32,000 odd units of sales were not accounted for in March 2011
due to transit issues with exports
• At a segmental level, the motorcycle segment continued its strong
growth led by the premium segment through the brands of Pulsar
and Discover (accounting for ~70% of total sales) while volumes
have grown 35.1% YoY in FY11. The domestic contribution to
motorcycle sales stood at 71.2% in FY11, flat YoY. However, in
the three-wheeler segment, we have witnessed a drop of ~560
bps YoY towards domestic contribution
• The three-wheeler segment witnessed a growth of 13.6% YoY at
33,349 units on strong domestic market growth of ~24.3% at
17,773 units. The export contribution to total sales in FY11 stood
at 31.5%, higher by 30 bps YoY reflecting a stronger export focus
for the company.
TVS Motors (TVSSUZ)
• TVS Motors saw a positive ending to the fiscal with a jump led by
the moped and motorcycle segments. On a full year basis, the
company registered 33.1% growth to touch the all-time high of 2
million unit sales mark
• Motorcycle volumes jumped to 79,642 units, an 11.2% MoM and
24.2% YoY increase as Jive and Wego volumes saw a positive
response with year end purchases
• Scooter sales, which had been lagging, saw a smart end to the
year with 42,665 units, a 5.8% MoM increase and 49.7% YoY
jump. Hero Honda and TVS have gained market share from Honda
Motors (the largest player) in the scooter segment to the tune of
310 bps
• The mopeds segment, which had been slack in the previous
months, has seen a handsome jump of 20.9% MoM to 68,901
units. This was due to year-end discounts led demand in the
southern region, which continues to remain the strongest region
for TVS Motors
• Exports continued to surprise and marked a rise of 12.2% MoM
and 34.4% YoY crossing its all-time level set in the previous
month at 26,979 units. The contribution of exports has
consistently seen a rise in FY11 with March 2011 witnessing
14.1% contribution with full year contribution at 11.6%. The rise in
sales can be attributed to an improvement in sales from the South
East Asian region
Four-wheeler industry
Commercial vehicles growth continues to be the strongest as on a YoY
basis it grew 30.3% in FY11. With a stronger budgetary push, we could
witness a pick-up in infra, capital goods-linked activities in CY11. This, in
turn, could help on the volumes visibility front for the segment. The
passenger car market continues to be strong with strong volume growth
of 24.0% in FY11. Input prices remain an overhang with rising prices and
the impending Japanese crisis. Hence, material prices could further rise
on a longer term. On the positive side, however, OEMs have some degree
of leverage on pricing as demand continues to grow, thus supporting
likely margin decline.
Market share movement
According to SIAM, the domestic market share for passenger vehicles
(PV) and CVs in March 2010 has been as follows.
Maruti Suzuki India (MARUTI)
• Maruti Suzuki India (MSIL) has completed the year with a bang
with highest sales numbers for FY11. The sales volume for the
market leader is reflective of two major things. Firstly, the demand
scene seems to be still on the positive side even as manufacturing
inflation is increasing at a fair clip and end product car prices are
rising. Secondly, it is also reflective of the strong discounts doled
out to buyers in year-end as inventories rose at the dealer end.
This is against the normal low discount phase in Q4
• Domestic sales have touched 110,424 units (38.8% YoY, 8.7%
MoM jump). Maruti has maintained overall market share of ~
42.7% for FY11 in the PV segment. On the domestic front, it has
seen a market share gain of 30 bps from 44.6% in FY10. The
competitive nature of the A2 segment and PV in general has not
significantly impacted MSIL’s volumes. On the contrary, the
market share and volumes have outperformed peers. The recent
quake in Japan may lead to some slowdown in production.
However, a strong inventory build-up in March 2011 would
compensate for any loss of production
• The bread and butter segment is the “A2 segment” (Alto, Swift,
Wagon-R, Zen, A-star, Ritz) (78,460 units, a 43.3% YoY jump) and
C segment (Omni, Versa and Eeco) (14,416 units, 32.6% YoY
increase). The Alto family, with the K-10 introduction, has
surpassed and touched record volumes of ~38,000 units followed
by Wagon-R at ~15,000 odd units. In the A2 segment, Ritz has
also started to show stronger volumes at ~6000 odd units. In the
high yielding A3 segment, overall volumes have jumped to 13,910
(6.8% MoM, 33.1% YoY increase) led by ~10,300 units for Swift
Dzire. In the C segment, both Omni and Eeco continue to do well
with volumes at ~7800, ~6600 odd units, respectively
• Export segment volumes seems to have bottomed out in
November 2010, December 2010 and now is registering better
volumes at 11,528 units, a ~14.1% increase on an MoM basis
Tata Motors (TELCO)
• Tata Motors posted consecutive strongest monthly sales in both
the domestic market as well as with overall global sales. Domestic
sales were driven by a stronger PV performance while global sales
were supported by higher Land Rover sales volumes
• Overall, global sales came in at 110,785 units, a ~9% YoY and
~8.0% MoM increase. Along with the parent sales of 83,363 units,
JLR sales came in at 24,101 units with 11.3% MoM increase as
Land Rover volumes jumped 10.2% MoM to 20,329 units. Jaguar
sales have been down 19% YoY at 3,772 with the discontinuance
of large selling X-type in CY10. JLR plans to launch hugely
anticipated model Land Rover “Evoque” in September 2011 and is
expected to be priced from £28,500 onwards
• At a segmental level, in standalone operations, CV demand has
picked up as per common practice led by year-end bulk
purchases. M&HCV volumes increased ~30.6% MoM at 24,972
units and 26.5% in FY11. The LCV segment also rebounded with
volumes of 30,386 units with a jump of 15.7% MoM and 21.8% in
FY11
• Passenger vehicles (inclusive of UVs) sales for the month
witnessed a softening in PV sales with overall volumes at 28,005
units (12.9% MoM decline). PV sales slid as Indica and Indigo
sales (6,937 units and 7,197 units, respectively) slowed in
comparison to previous months. Tata Nano, however, was
resilient and improved on previous month volumes with sales of
8,707 units (up ~5.4% MoM). The management remains confident
of witnessing volumes of Nano of ~10,000 odd units, going
forward
• Exports, which had been sluggish in February 2011, improved in
March 2011 with a rise of 31.7% MoM at 5,932 units and
contribution towards total sales rising back to full year average at
~7.1%
Mahindra and Mahindra (MAHMAH)
• Mahindra and Mahindra (M&M) has witnessed positive growth
momentum in volumes in all segments from UV to tractors as year
end clearance of dealer inventory raised sales on an MoM basis
• The utility vehicle segment inclusive of four-wheeler pick-ups
grew to 27,822 units, a 33.0% YoY and 15.0% MoM jump. It has
witnessed a market share rise of 150 bps in FY11 in the LCV
segment to 29.9%. Volumes in the UV segment have grown
primarily due to the performance of the Bolero and Scorpio, which
sold ~8,200 and 4,100 odd units in March 2011. The sales of Xylo
(~2,600 odd units) are neck and neck with Tata Sumo, which has
been languishing in volume terms in FY11.
• Automotive exports have been erratic of late with exports for
March 2011 rising 44.2% MoM with volumes of 2,034 units for the
month
• The farm equipment segment (FES) continued its stable
performance, witnessing 4.2% MoM, 22.8% YoY rise at 19,848
units. Domestic volumes grew ~3.3% MoM at 18,729 units. On
the exports side, volumes jumped to 1,119 units (23.4% MoM
growth). The higher impetus from the government towards the
rural segment with the increase in farm credit allocation by | 1
lakh crore would be a positive in improving further offtake in the
agri-related segment
Ashok Leyland (ASHLEY)
• Ashok Leyland (ALL) witnessed robust growth as CV sales picked
up post the moderation in volumes in December 2010, January
2011. Overall sales volumes were at a lifetime high at 12,168 units
reflecting a growth of 24.2% MoM and 20.9% YoY
• The M&HCV passenger segment has been slower in growth.
However, year-end buying has pushed sales up 7.2% YoY at 2,728
units. ALL has continued to do well in the goods segment ably
supported by new product launches in the U-trucks category. The
MHCV goods segment has seen a 22.3% MoM, 25.0% YoY
growth at 9,296 units, thereby providing volume comfort with
commercial order booking expected to increase as infrastructure
pick-up in FY12 is expected to improve
• Exports have risen in March 2011 with sales reaching 856 units
(up 4.9% MoM, 11.5% YoY). The export contribution to total sales
has been declining with March 2011 contribution at 7.0% lower
from 8.3% in the previous month
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
FY11 ends positively! FY12 headwinds galore…
Volume growth continues to top up a robust year…
March volume growth has topped a robust FY11 due to higher year-end
purchases from various retail and corporate buyers amid steeper
discounts as dealers looked at inventory clearance. The growth has been
robust at 19.5% YoY and 4.8% MoM increase (on a higher base) at ~1.58
million units reaching 1.66 million units. The growth in sales in CY11
despite across the board price hikes in the automobile sector is a strong
indicator of pricing power in the industry and the growing income
strength among the growing middle class. The March 2011 MoM sales
growth has confirmed this fact to a certain degree. However, we believe
that further recurring price hikes in FY12 would definitely hinder higher
ended 13-16% demand growth expectations. The volume growth of the
industry in FY11 has been ~26.6% with the passenger car (PV) segment
growing 24.0%, commercial vehicle (CV) segment growing the fastest at
30.3% with the two–wheeler segment growing at 26.8%. The demand
scene would be a key deliverable to be watched for industry growth along
with input prices, which could deflate profitability.
Manufacturing inflation raises risk of further interest rate tightening…
The latest inflation figures of ~9% were reflective of the existence of high
manufacturing inflation both from the demand and supply side. The
strong demand has provided higher pricing power to OEMs leading to rise
in end product prices. On the supply side, higher demand pull has fuelled
the input prices and labour costs rises pushing manufacturing inflation
even higher. This rise in inflation from the manufacturing side could lead
to potential increase of interest rates of ~25-50 bps in the coming period
leading to negative impact on rate sensitive like automobiles.
Commodity prices still in the up-cycle
Commodity prices led by steel, aluminium and plastics prices have
increased ~3-15% on a YoY basis. The price of natural rubber has seen
the steepest hike and has kept on rising in this fiscal touching a peak of |
235 (~58% higher YoY). Our in-house auto RM index is also up ~13% on
a YoY basis (Refer Exhibit 16). According to our earlier expectations,
global commodity prices have stiffened post the sudden dip in the
aftermath of Japanese disaster. This commodity cycle up-move continues
to remain the toughest challenge for the industry.
Industry outlook
The outlook towards the volume growth of the sector is positive. We
expect volume growth to range between 13% and 16% in FY12E. On the
index performance basis, the BSE Auto index has outperformed the BSE
Sensex with YoY return of 25.1% as compared to 9.7% during the same
period. The demand side has remained robust in FY11. Though we
believe demand is structural, immediate concerns for the sector like
commodity hikes and unfavourable currency volatility could cause serious
concern to the whole industry as profitability could see erosion. Among
our ICICIdirect.com auto-coverage, we remain bullish on frontline OEM
stocks like Tata Motors, Maruti Suzuki. In the ancillary coverage, we find
favourable valuation and business growth perspectives in Bharat Forge
and Exide Industries.
Latest Events / News
• US based company Ford has revealed that the new version of its
mid-size sedan Fiesta will be the first among eight products that it
will be launching by 2015. The new Fiesta is expected to be priced
above | 8 lakh. The sedan will be produced at its Chennai facility,
which has a production capacity of 2 lakh cars on a three shift
basis and 2.5 lakh engines every year
• Japanese auto major Nissan may launch two new vehicles in India
by 2012. According to reports, a global sedan will be in the market
while another vehicle, which is expected to compete with Toyota's
Innova, will be launched during this year. The company also
expects to export 1.1 lakh units of Micra to Europe, Africa and
West Asia by October 2011
• Maharashtra is planning to withdraw its February notification that
restricts the refund of value-added tax (VAT) only on vehicles sold
to consumers in the state and not those sold to the distribution
and sales arms of car makers. In February, the state said those
automakers who are getting a refund of VAT that they pay to
component makers, will not be eligible to claim refund on VAT if
the ultimate sale of vehicles takes place out of the state. This
would help in maintaining the state as an active manufacturing
hub, which has seen serious competition from the likes of Tamil
Nadu, Gujarat and Uttarakhand
• The Indian automotive sector, which has become an important
attraction for many foreign players in the luxury segment, has not
been left behind. The latest luxury car Aston Martin One 77 at | 20
crore has become the costliest car not only in India but also in the
world. The company has launched eight models in the market at
price ranging from | 1.35 to | 20 crore
• The country's largest carmaker Maruti Suzuki India has again
increased the prices of its vehicles across all models by up to |
9,000 to offset rising input costs. It is the second time in 2011 that
the firm is increasing prices of its vehicles. In January, the
company had hiked prices by up to | 8,000 across models, except
its newly launched compact car Alto K10
• Bajaj Auto, India’s second largest two-wheeler maker, launched
the Discover 125 to fill the missing gap between Discover 100 and
Discover 150 to complete the entire range. Bajaj Discover-125 is
priced at | 45,500 (ex-showroom price in New Delhi) and hopes to
sell about 40,000 units per month of the Discover new 125 cc bike
Two–three wheeler industry
The two wheeler industry has continued on the growth trend and
completed FY11 with a strong 18.7% MoM jump and 26.8% YTD with
market leader Hero Honda posting record volumes above 5 lakh units
even on an increasing base. TVS Motors also witnessed a rebound post
January 2011 with ~31.0% YoY growth. Scooter sales growth rates
continued to remain the highest in the two-wheeler segment. However,
the turn of the new fiscal would be an important indicator towards the
demand scenario.
Market share movement
According to the data released by the Society of Indian Automobile
Manufacturers (SIAM), the domestic market share of two and threewheeler
players is as below for March 2010.
Hero Honda Motors (HERHON)
• Hero Honda Motors, the market leader in the two-wheeler
segment, finished the year with a bang as it touched lifetime high
sales volumes. HHL has continued to maintain its domestic market
share with a marginal improvement of 10 bps each (MoM) in the
motorcycle and total two-wheeler segment (Refer Exhibit: 1, 3)
• The company registered volumes of 515,852 units with a strong
24.4% YoY and a 9.3% MoM rise as year-end purchases were
enhanced with higher discounts at the dealers end with clearance
of old inventory
• The scooter segment continued to gain market share with volume
of 37,972 units, a growth of 56.0% YoY and 68.6% YoY for FY11.
The company has increased its focus on the scooter segment.
This has got reflected as it gained 220 bps YoY in the domestic
market to 16.3% while market leader HMSI lost 750 bps
Bajaj Auto (BAAUTO)
• Bajaj Auto has seen a tepid ending to FY11 with overall sales of
3.8 million units as sales were hampered by transit issues towards
export sales. On the domestic front, its market share remains at
26.8% in the motorcycle segment (Refer Exhibit: 1, 3)
• Total volumes for the month were at 307,738 units. This was a
sedate 12.2% YoY growth. However, it slipped 5.9% MoM as
32,000 odd units of sales were not accounted for in March 2011
due to transit issues with exports
• At a segmental level, the motorcycle segment continued its strong
growth led by the premium segment through the brands of Pulsar
and Discover (accounting for ~70% of total sales) while volumes
have grown 35.1% YoY in FY11. The domestic contribution to
motorcycle sales stood at 71.2% in FY11, flat YoY. However, in
the three-wheeler segment, we have witnessed a drop of ~560
bps YoY towards domestic contribution
• The three-wheeler segment witnessed a growth of 13.6% YoY at
33,349 units on strong domestic market growth of ~24.3% at
17,773 units. The export contribution to total sales in FY11 stood
at 31.5%, higher by 30 bps YoY reflecting a stronger export focus
for the company.
TVS Motors (TVSSUZ)
• TVS Motors saw a positive ending to the fiscal with a jump led by
the moped and motorcycle segments. On a full year basis, the
company registered 33.1% growth to touch the all-time high of 2
million unit sales mark
• Motorcycle volumes jumped to 79,642 units, an 11.2% MoM and
24.2% YoY increase as Jive and Wego volumes saw a positive
response with year end purchases
• Scooter sales, which had been lagging, saw a smart end to the
year with 42,665 units, a 5.8% MoM increase and 49.7% YoY
jump. Hero Honda and TVS have gained market share from Honda
Motors (the largest player) in the scooter segment to the tune of
310 bps
• The mopeds segment, which had been slack in the previous
months, has seen a handsome jump of 20.9% MoM to 68,901
units. This was due to year-end discounts led demand in the
southern region, which continues to remain the strongest region
for TVS Motors
• Exports continued to surprise and marked a rise of 12.2% MoM
and 34.4% YoY crossing its all-time level set in the previous
month at 26,979 units. The contribution of exports has
consistently seen a rise in FY11 with March 2011 witnessing
14.1% contribution with full year contribution at 11.6%. The rise in
sales can be attributed to an improvement in sales from the South
East Asian region
Four-wheeler industry
Commercial vehicles growth continues to be the strongest as on a YoY
basis it grew 30.3% in FY11. With a stronger budgetary push, we could
witness a pick-up in infra, capital goods-linked activities in CY11. This, in
turn, could help on the volumes visibility front for the segment. The
passenger car market continues to be strong with strong volume growth
of 24.0% in FY11. Input prices remain an overhang with rising prices and
the impending Japanese crisis. Hence, material prices could further rise
on a longer term. On the positive side, however, OEMs have some degree
of leverage on pricing as demand continues to grow, thus supporting
likely margin decline.
Market share movement
According to SIAM, the domestic market share for passenger vehicles
(PV) and CVs in March 2010 has been as follows.
Maruti Suzuki India (MARUTI)
• Maruti Suzuki India (MSIL) has completed the year with a bang
with highest sales numbers for FY11. The sales volume for the
market leader is reflective of two major things. Firstly, the demand
scene seems to be still on the positive side even as manufacturing
inflation is increasing at a fair clip and end product car prices are
rising. Secondly, it is also reflective of the strong discounts doled
out to buyers in year-end as inventories rose at the dealer end.
This is against the normal low discount phase in Q4
• Domestic sales have touched 110,424 units (38.8% YoY, 8.7%
MoM jump). Maruti has maintained overall market share of ~
42.7% for FY11 in the PV segment. On the domestic front, it has
seen a market share gain of 30 bps from 44.6% in FY10. The
competitive nature of the A2 segment and PV in general has not
significantly impacted MSIL’s volumes. On the contrary, the
market share and volumes have outperformed peers. The recent
quake in Japan may lead to some slowdown in production.
However, a strong inventory build-up in March 2011 would
compensate for any loss of production
• The bread and butter segment is the “A2 segment” (Alto, Swift,
Wagon-R, Zen, A-star, Ritz) (78,460 units, a 43.3% YoY jump) and
C segment (Omni, Versa and Eeco) (14,416 units, 32.6% YoY
increase). The Alto family, with the K-10 introduction, has
surpassed and touched record volumes of ~38,000 units followed
by Wagon-R at ~15,000 odd units. In the A2 segment, Ritz has
also started to show stronger volumes at ~6000 odd units. In the
high yielding A3 segment, overall volumes have jumped to 13,910
(6.8% MoM, 33.1% YoY increase) led by ~10,300 units for Swift
Dzire. In the C segment, both Omni and Eeco continue to do well
with volumes at ~7800, ~6600 odd units, respectively
• Export segment volumes seems to have bottomed out in
November 2010, December 2010 and now is registering better
volumes at 11,528 units, a ~14.1% increase on an MoM basis
Tata Motors (TELCO)
• Tata Motors posted consecutive strongest monthly sales in both
the domestic market as well as with overall global sales. Domestic
sales were driven by a stronger PV performance while global sales
were supported by higher Land Rover sales volumes
• Overall, global sales came in at 110,785 units, a ~9% YoY and
~8.0% MoM increase. Along with the parent sales of 83,363 units,
JLR sales came in at 24,101 units with 11.3% MoM increase as
Land Rover volumes jumped 10.2% MoM to 20,329 units. Jaguar
sales have been down 19% YoY at 3,772 with the discontinuance
of large selling X-type in CY10. JLR plans to launch hugely
anticipated model Land Rover “Evoque” in September 2011 and is
expected to be priced from £28,500 onwards
• At a segmental level, in standalone operations, CV demand has
picked up as per common practice led by year-end bulk
purchases. M&HCV volumes increased ~30.6% MoM at 24,972
units and 26.5% in FY11. The LCV segment also rebounded with
volumes of 30,386 units with a jump of 15.7% MoM and 21.8% in
FY11
• Passenger vehicles (inclusive of UVs) sales for the month
witnessed a softening in PV sales with overall volumes at 28,005
units (12.9% MoM decline). PV sales slid as Indica and Indigo
sales (6,937 units and 7,197 units, respectively) slowed in
comparison to previous months. Tata Nano, however, was
resilient and improved on previous month volumes with sales of
8,707 units (up ~5.4% MoM). The management remains confident
of witnessing volumes of Nano of ~10,000 odd units, going
forward
• Exports, which had been sluggish in February 2011, improved in
March 2011 with a rise of 31.7% MoM at 5,932 units and
contribution towards total sales rising back to full year average at
~7.1%
Mahindra and Mahindra (MAHMAH)
• Mahindra and Mahindra (M&M) has witnessed positive growth
momentum in volumes in all segments from UV to tractors as year
end clearance of dealer inventory raised sales on an MoM basis
• The utility vehicle segment inclusive of four-wheeler pick-ups
grew to 27,822 units, a 33.0% YoY and 15.0% MoM jump. It has
witnessed a market share rise of 150 bps in FY11 in the LCV
segment to 29.9%. Volumes in the UV segment have grown
primarily due to the performance of the Bolero and Scorpio, which
sold ~8,200 and 4,100 odd units in March 2011. The sales of Xylo
(~2,600 odd units) are neck and neck with Tata Sumo, which has
been languishing in volume terms in FY11.
• Automotive exports have been erratic of late with exports for
March 2011 rising 44.2% MoM with volumes of 2,034 units for the
month
• The farm equipment segment (FES) continued its stable
performance, witnessing 4.2% MoM, 22.8% YoY rise at 19,848
units. Domestic volumes grew ~3.3% MoM at 18,729 units. On
the exports side, volumes jumped to 1,119 units (23.4% MoM
growth). The higher impetus from the government towards the
rural segment with the increase in farm credit allocation by | 1
lakh crore would be a positive in improving further offtake in the
agri-related segment
Ashok Leyland (ASHLEY)
• Ashok Leyland (ALL) witnessed robust growth as CV sales picked
up post the moderation in volumes in December 2010, January
2011. Overall sales volumes were at a lifetime high at 12,168 units
reflecting a growth of 24.2% MoM and 20.9% YoY
• The M&HCV passenger segment has been slower in growth.
However, year-end buying has pushed sales up 7.2% YoY at 2,728
units. ALL has continued to do well in the goods segment ably
supported by new product launches in the U-trucks category. The
MHCV goods segment has seen a 22.3% MoM, 25.0% YoY
growth at 9,296 units, thereby providing volume comfort with
commercial order booking expected to increase as infrastructure
pick-up in FY12 is expected to improve
• Exports have risen in March 2011 with sales reaching 856 units
(up 4.9% MoM, 11.5% YoY). The export contribution to total sales
has been declining with March 2011 contribution at 7.0% lower
from 8.3% in the previous month
No comments:
Post a Comment