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Automobiles
Industry growth moderates over April; expect FY12E
sales to ease to trend levels of 12-15%
Industry sales growth moderates over April: The monthly sales reported
by OEMs across segments suggest that the rising cost of ownership is
impacting consumer sentiment. Monthly domestic sales trends: Maruti
(+9% yoy), Tata Motors M&HCV (+6% yoy), Mahindra UV sales (+15%
yoy), tractor sales (+14% yoy), TVS Motors (+13% yoy), and Bajaj Auto
(+5% yoy). Management comments from various OEMs suggest that they
are building in growth rates of c.12-15% over the year (significantly lower
than the last two year average growth of c.25%).
• Sector View: Over the past year, monthly running expenses for
automobiles have risen by c.15% given rising interest rates, higher fuel
cost as well as increasing product prices (Indian Autos: Getting Pricey).
While we expect growth rates to ease into the year, competitive intensity is
rising – particularly in the passenger car and two-wheeler segments. Our
India strategy team has an UW stance on the automobile sector.
• Maruti’s monthly sales moderate (+4% yoy): MSIL’s sales growth
eased considerably over April, with the domestic segment growing (+9%
yoy). The management in its recently held conference call had highlighted
that footfalls and customer conversions have declined since December.
They expect growth rates for FY12E to moderate to c.12-15%.
• Tata Motors' April sales (including exports) came in at 64,383 vehicles,
+13% yoy, with growth being driven by LCVs (+28% yoy). The domestic
M/HCV sales at 13,936 units however moderated to 6% yoy, while
passenger car sales were up marginally (+2% yoy).
• M&M: Domestic UV sales for the company have come in at c.15%, while
growth in tractors has moderated to 13%. Management in a media
interview (ET Now) has guided for industry growth of 12%-14% yoy over
the year.
• TVS Motors’ April numbers came in at 164,183 (+13% yoy) – growth
rates for motorcycles eased considerably to 5% yoy. Sales growth was
driven by scooter segment +31% yoy.
• Bajaj Auto: Sales at 367,309 (+17% yoy) were driven by the export
segment (+39% yoy). However, domestic segment volumes grew at a
sedate +5% y/y.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Automobiles
Industry growth moderates over April; expect FY12E
sales to ease to trend levels of 12-15%
Industry sales growth moderates over April: The monthly sales reported
by OEMs across segments suggest that the rising cost of ownership is
impacting consumer sentiment. Monthly domestic sales trends: Maruti
(+9% yoy), Tata Motors M&HCV (+6% yoy), Mahindra UV sales (+15%
yoy), tractor sales (+14% yoy), TVS Motors (+13% yoy), and Bajaj Auto
(+5% yoy). Management comments from various OEMs suggest that they
are building in growth rates of c.12-15% over the year (significantly lower
than the last two year average growth of c.25%).
• Sector View: Over the past year, monthly running expenses for
automobiles have risen by c.15% given rising interest rates, higher fuel
cost as well as increasing product prices (Indian Autos: Getting Pricey).
While we expect growth rates to ease into the year, competitive intensity is
rising – particularly in the passenger car and two-wheeler segments. Our
India strategy team has an UW stance on the automobile sector.
• Maruti’s monthly sales moderate (+4% yoy): MSIL’s sales growth
eased considerably over April, with the domestic segment growing (+9%
yoy). The management in its recently held conference call had highlighted
that footfalls and customer conversions have declined since December.
They expect growth rates for FY12E to moderate to c.12-15%.
• Tata Motors' April sales (including exports) came in at 64,383 vehicles,
+13% yoy, with growth being driven by LCVs (+28% yoy). The domestic
M/HCV sales at 13,936 units however moderated to 6% yoy, while
passenger car sales were up marginally (+2% yoy).
• M&M: Domestic UV sales for the company have come in at c.15%, while
growth in tractors has moderated to 13%. Management in a media
interview (ET Now) has guided for industry growth of 12%-14% yoy over
the year.
• TVS Motors’ April numbers came in at 164,183 (+13% yoy) – growth
rates for motorcycles eased considerably to 5% yoy. Sales growth was
driven by scooter segment +31% yoy.
• Bajaj Auto: Sales at 367,309 (+17% yoy) were driven by the export
segment (+39% yoy). However, domestic segment volumes grew at a
sedate +5% y/y.
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