India Automobile – Growth forecast lowered further:: Sunidhi

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India Automobile – Growth forecast lowered further
Auto sales continued its downward trend for third consecutive month, forcing SIAM to again lower its sales forecast for FY12 from its earlier projection of 14-16% growth to 11-13%. Monthly sales numbers reported by the companies suggest that rising cost of finance, elevated fuel prices and increasing cost of vehicles are dampening consumer sentiments. After a robust FY11, the start quarter of FY12 does not seem to be encouraging and signs of slowdown are gaining momentum in four wheeler segment, while the two wheeler segment is still showing signs of resilience.
Industry Sales for June 2011 – Growth momentum slowing down
Total Industry sales for the month of June 2011 stood at 1.6 mn units a growth of 14.4% YoY. Domestic sales recorded a growth of 12.9% YoY, led by M&HCV & Two wheelers segment, which performed well in the month. Export sales stood at 253,865 units up by 25.5% as compared to last year.
Two Wheeler Segment – Still resilient
In Two wheeler segment TVS recorded highest growth, supported by strong demand across the segments. Hero Honda continues to show good performance, 4rd consecutive month selling more than 5 lakh units. Bajaj Auto also showed healthy growth rate, it has recorded highest ever exports in June 2011. Foreign players also posted good set of numbers in two wheelers such as Yamaha Motors, whose sales stood at 36,595 units compared to 28,155 units in June 2010. Suzuki Motorcycle India reported 42.1% growth in sales in June 2011, to 25,367 units. 3- W segment of Bajaj & TVS continued to post good growth.
Four Wheeler Segment – Dismal performance continues
The four wheeler segment continued to post dismal performance. Production losses due to workers strike was the main reason for Maruti Suzuki poor performance. Tata Motors registered strong growth led by CV segment. Nano volumes dipped for 3rd consecutive time. M&M continued to post strong set of numbers in both auto as well as tractor segment. Other Foreign players also reported a decent volume growth such as Hyundai Motors 14.0%, General Motors 10.5%. Companies such as Skoda Auto posted a growth of 69% to 2611 units from 1639 units in June 2010, while Volkswagen reported a 166% jump in June sales to 5,397 units. It is interesting to note that foreign players have been able to increase their market share on the cost of domestic players such as Maruti, Tata Motors etc.
July 13, 2011