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Auto sales continued its mixed trend in August 2011 as well, as demand for
two-wheelers, utility vehicles (UV) and light commercial vehicles (LCV) maintained
their healthy volume momentum; however, passenger car and medium and heavy
commercial vehicles (M&HCV) continued to be affected by macro headwinds in
the form of higher interest rates and fuel prices. Mahindra and Mahindra (M&M)
reported better-than-expected volumes, driven by strong performance of its
automotive and tractor segment, while Maruti's sales continued to be impacted by
sluggish domestic demand and production loss at the Manesar plant. Going
ahead, we expect the two-wheeler segment to sustain its volume momentum;
however, the passenger vehicle (PV) segment’s demand is likely to improve with
the onset of the festive season.
Tata Motors (TML) reported a 2.8% yoy (up 0.8% mom) drop in its total volumes,
primarily led by a 34.6% yoy (4.5% mom) decline in the PV segment. However,
CV sales continued to remain strong, driven by robust momentum in the LCV
segment, which jumped by 27.1% yoy (2.4% mom). The PV segment continued its
disappointing run as Nano sales plunged by 85% yoy and Indigo and Indica sales
declined by 24% and 4% yoy, respectively.
Maruti recorded a 12.7% yoy (up 21.4% mom) decline in its total volumes to
91,442 units on account of continued slowdown in the domestic passenger car
segment and due to disruption in production at the Manesar plant because of
labour issues. Total domestic volumes witnessed a 16.8% yoy (up 15.9% mom)
drop to 77,086 units, led by a 26.9% and 18.3% yoy decline in the compact and
mini segments, respectively. However, the company’s exports buckled the
downward trend and posted 18.5% yoy growth (63.2% mom).
M&M maintained its strong momentum and reported better-than-expected
volume growth of 26.8% yoy (down 4.7% mom) in total sales to 53,687 units. The
company’s performance was aided by robust 30.4% yoy (down 4.9% mom)
growth in automotive sales and healthy 19.1% yoy growth (down 4.3% mom) in
tractor sales. The automotive segment’s growth was driven by robust 66.8% yoy
(down 6.7% mom) jump in the four-wheeler pick-up segment and 26% yoy
(18.5% mom) growth in the three-wheeler segment.
Two-wheelers and three-wheelers: Bajaj Auto (BAL) registered marginally
better-than-expected volume growth of 16.2% yoy (5.2% mom) to 382,739 units,
as the motorcycle segment posted the highest-ever monthly sales during August
2011. Hero MotoCorp continued to lead the two-wheeler pack and posted robust
volume growth of 18.6% yoy (2.6% mom). TVS reported 14.2% yoy (1.5% mom)
growth in total volumes to 194,898 units, driven by continued growth in domestic
as well as exports sales.
Tata Motors
TML reported a 2.8% yoy (up 0.8% mom) decline in total volumes to 64,078
units, led by continued weakness in PV volumes, which witnessed a 34.6% yoy
(4.5% mom) decline in sales.
CV sales were marginally ahead of expectations, posting strong growth of
18.2% yoy (2.9% mom) to 46,953 units. Performance in the CV segment was
led by strong momentum in the LCV segment, which grew by 27.1% yoy (2.4%
mom). The M&HCV segment grew by 5.8% yoy (3.6% mom).
The PV segment’s sales continued the disappointing run; Nano dispatches
plunged by 85% yoy to 1,202 units, while Indica and Indigo sales declined by
4% and 24% yoy, respectively.
Production at the Sanand plant was shut for about a fortnight in August for
maintenance purposes and to rationalise and align inventory levels.
Maruti
Maruti reported in-line sales volume for August 2011, posting a 12.7% yoy
(up 21.4% mom) decline in volumes to 91,442 units. Volume performance
continues to be affected by the slowdown in the domestic passenger vehicle
segment and due to disruption in production at the Manesar plant because of
labour issues.
Domestic volumes declined by 16.8% yoy (up 15.9% mom), while exports
buckled the downward trend and posted 18.5% yoy (up 63.2% mom) growth.
As per the new SIAM classification, volumes in the mini, compact, super
compact and vans segments declined by 18.3% (down 1.4% mom), 26.9% (up
76.3% mom), 6.8% (up 160% mom) and 11.7% yoy (down 6.6% mom),
respectively.
Maruti unveiled the next generation new Swift during August 2011.
Mahindra & Mahindra
M&M continued to report better-than-expected volume numbers, driven by
strong performance across all product segments. During August 2011, the
automotive segment reported strong growth of 30.4% yoy (down 4.9% mom)
to 37,684 units, while the tractors segment posted healthy 19.1% yoy (down
4.3% mom) growth to 16,003 units. As a result, total volumes registered
impressive growth of 26.8% yoy (down 4.7% mom) to 53,687 units.
In the automotive segment, the four-wheeler pick-up segment continued its
impressive run, posting 66.8% yoy (down 6.7% mom) growth. Logan sales
continued the strong momentum, registering growth of 113.5% yoy (4.9%
mom), while three-wheeler sales grew by 26% yoy (18.5% mom).
Within the tractors space, domestic sales reported a strong 20.9% yoy (down
4.1% mom) increase in volumes to 15,059 units, while exports volumes
declined marginally by 3.9% yoy (down 7.4% mom).
Bajaj Auto
BAL reported slightly better-than-expected volume growth of 16.2% yoy (5.2%
mom) to 382,739 units, led by 16.9% yoy growth (6.3% mom) in the
motorcycle segment and an 11.2% yoy (down 2% mom) increase in the
three-wheeler segment.
Pulsar and Discover accounted for ~65% of overall motorcycle sales,
with Discover registering 130,000 units and Pulsar reporting 87,500 units.
Three-wheeler sales stood at 44,685 units.
Exports continued its strong momentum, reporting 40.2% yoy (down 4% mom)
growth to 138,225 units.
Management expects to increase the market share in the motorcycle segment
to ~30% by December 2011 as against the current market share of ~26%.
Hero MotoCorp
Hero MotoCorp reported in-line 18.6% yoy growth (2.6% mom) in volumes to
503,654 units, led by strong momentum across all product segments.
New product launches and refreshed product ranges continued to drive the
company’s volume performance.
TVS Motor
TVS reported marginally better-than-expected 14.2% yoy (1.5% mom) growth
in total volumes to 194,898 units. The strong performance was supported by
13.8% yoy (0.9% mom) growth in the two-wheeler segment and 30% yoy
(34.7% qoq) growth in the three-wheeler segment.
In the two-wheeler segment, motorcycle volumes grew by healthy 16.8% yoy
(7.2% mom) to 77,726 units. Scooter sales continued to register strong
volumes, posting 27.7% yoy (4.5% mom) growth to 52,253 units.
Exports volume also maintained its strong traction, registering impressive
48.1% yoy (9% mom) growth to 29,984 units.
Outlook
Considering the near-term macroeconomic challenges, we expect the auto industry
to register moderate volume growth of 12–13% for FY2012. However, we believe
low penetration levels coupled with a healthy and sustainable economic
environment and favourable demographics supported by increasing per capita
income levels will drive long-term growth of the Indian auto industry. As such,
we prefer stocks that have strong fundamentals, ability to deliver a strong top-line
performance and are available at attractive valuations. We continue to prefer
companies with a strong pricing power and high exposure to rural and exports
markets.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Auto sales continued its mixed trend in August 2011 as well, as demand for
two-wheelers, utility vehicles (UV) and light commercial vehicles (LCV) maintained
their healthy volume momentum; however, passenger car and medium and heavy
commercial vehicles (M&HCV) continued to be affected by macro headwinds in
the form of higher interest rates and fuel prices. Mahindra and Mahindra (M&M)
reported better-than-expected volumes, driven by strong performance of its
automotive and tractor segment, while Maruti's sales continued to be impacted by
sluggish domestic demand and production loss at the Manesar plant. Going
ahead, we expect the two-wheeler segment to sustain its volume momentum;
however, the passenger vehicle (PV) segment’s demand is likely to improve with
the onset of the festive season.
Tata Motors (TML) reported a 2.8% yoy (up 0.8% mom) drop in its total volumes,
primarily led by a 34.6% yoy (4.5% mom) decline in the PV segment. However,
CV sales continued to remain strong, driven by robust momentum in the LCV
segment, which jumped by 27.1% yoy (2.4% mom). The PV segment continued its
disappointing run as Nano sales plunged by 85% yoy and Indigo and Indica sales
declined by 24% and 4% yoy, respectively.
Maruti recorded a 12.7% yoy (up 21.4% mom) decline in its total volumes to
91,442 units on account of continued slowdown in the domestic passenger car
segment and due to disruption in production at the Manesar plant because of
labour issues. Total domestic volumes witnessed a 16.8% yoy (up 15.9% mom)
drop to 77,086 units, led by a 26.9% and 18.3% yoy decline in the compact and
mini segments, respectively. However, the company’s exports buckled the
downward trend and posted 18.5% yoy growth (63.2% mom).
M&M maintained its strong momentum and reported better-than-expected
volume growth of 26.8% yoy (down 4.7% mom) in total sales to 53,687 units. The
company’s performance was aided by robust 30.4% yoy (down 4.9% mom)
growth in automotive sales and healthy 19.1% yoy growth (down 4.3% mom) in
tractor sales. The automotive segment’s growth was driven by robust 66.8% yoy
(down 6.7% mom) jump in the four-wheeler pick-up segment and 26% yoy
(18.5% mom) growth in the three-wheeler segment.
Two-wheelers and three-wheelers: Bajaj Auto (BAL) registered marginally
better-than-expected volume growth of 16.2% yoy (5.2% mom) to 382,739 units,
as the motorcycle segment posted the highest-ever monthly sales during August
2011. Hero MotoCorp continued to lead the two-wheeler pack and posted robust
volume growth of 18.6% yoy (2.6% mom). TVS reported 14.2% yoy (1.5% mom)
growth in total volumes to 194,898 units, driven by continued growth in domestic
as well as exports sales.
Tata Motors
TML reported a 2.8% yoy (up 0.8% mom) decline in total volumes to 64,078
units, led by continued weakness in PV volumes, which witnessed a 34.6% yoy
(4.5% mom) decline in sales.
CV sales were marginally ahead of expectations, posting strong growth of
18.2% yoy (2.9% mom) to 46,953 units. Performance in the CV segment was
led by strong momentum in the LCV segment, which grew by 27.1% yoy (2.4%
mom). The M&HCV segment grew by 5.8% yoy (3.6% mom).
The PV segment’s sales continued the disappointing run; Nano dispatches
plunged by 85% yoy to 1,202 units, while Indica and Indigo sales declined by
4% and 24% yoy, respectively.
Production at the Sanand plant was shut for about a fortnight in August for
maintenance purposes and to rationalise and align inventory levels.
Maruti
Maruti reported in-line sales volume for August 2011, posting a 12.7% yoy
(up 21.4% mom) decline in volumes to 91,442 units. Volume performance
continues to be affected by the slowdown in the domestic passenger vehicle
segment and due to disruption in production at the Manesar plant because of
labour issues.
Domestic volumes declined by 16.8% yoy (up 15.9% mom), while exports
buckled the downward trend and posted 18.5% yoy (up 63.2% mom) growth.
As per the new SIAM classification, volumes in the mini, compact, super
compact and vans segments declined by 18.3% (down 1.4% mom), 26.9% (up
76.3% mom), 6.8% (up 160% mom) and 11.7% yoy (down 6.6% mom),
respectively.
Maruti unveiled the next generation new Swift during August 2011.
Mahindra & Mahindra
M&M continued to report better-than-expected volume numbers, driven by
strong performance across all product segments. During August 2011, the
automotive segment reported strong growth of 30.4% yoy (down 4.9% mom)
to 37,684 units, while the tractors segment posted healthy 19.1% yoy (down
4.3% mom) growth to 16,003 units. As a result, total volumes registered
impressive growth of 26.8% yoy (down 4.7% mom) to 53,687 units.
In the automotive segment, the four-wheeler pick-up segment continued its
impressive run, posting 66.8% yoy (down 6.7% mom) growth. Logan sales
continued the strong momentum, registering growth of 113.5% yoy (4.9%
mom), while three-wheeler sales grew by 26% yoy (18.5% mom).
Within the tractors space, domestic sales reported a strong 20.9% yoy (down
4.1% mom) increase in volumes to 15,059 units, while exports volumes
declined marginally by 3.9% yoy (down 7.4% mom).
Bajaj Auto
BAL reported slightly better-than-expected volume growth of 16.2% yoy (5.2%
mom) to 382,739 units, led by 16.9% yoy growth (6.3% mom) in the
motorcycle segment and an 11.2% yoy (down 2% mom) increase in the
three-wheeler segment.
Pulsar and Discover accounted for ~65% of overall motorcycle sales,
with Discover registering 130,000 units and Pulsar reporting 87,500 units.
Three-wheeler sales stood at 44,685 units.
Exports continued its strong momentum, reporting 40.2% yoy (down 4% mom)
growth to 138,225 units.
Management expects to increase the market share in the motorcycle segment
to ~30% by December 2011 as against the current market share of ~26%.
Hero MotoCorp
Hero MotoCorp reported in-line 18.6% yoy growth (2.6% mom) in volumes to
503,654 units, led by strong momentum across all product segments.
New product launches and refreshed product ranges continued to drive the
company’s volume performance.
TVS Motor
TVS reported marginally better-than-expected 14.2% yoy (1.5% mom) growth
in total volumes to 194,898 units. The strong performance was supported by
13.8% yoy (0.9% mom) growth in the two-wheeler segment and 30% yoy
(34.7% qoq) growth in the three-wheeler segment.
In the two-wheeler segment, motorcycle volumes grew by healthy 16.8% yoy
(7.2% mom) to 77,726 units. Scooter sales continued to register strong
volumes, posting 27.7% yoy (4.5% mom) growth to 52,253 units.
Exports volume also maintained its strong traction, registering impressive
48.1% yoy (9% mom) growth to 29,984 units.
Outlook
Considering the near-term macroeconomic challenges, we expect the auto industry
to register moderate volume growth of 12–13% for FY2012. However, we believe
low penetration levels coupled with a healthy and sustainable economic
environment and favourable demographics supported by increasing per capita
income levels will drive long-term growth of the Indian auto industry. As such,
we prefer stocks that have strong fundamentals, ability to deliver a strong top-line
performance and are available at attractive valuations. We continue to prefer
companies with a strong pricing power and high exposure to rural and exports
markets.
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