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Automobiles
India
Another strong month for Hero and M&M. Mahindra and Hero Motocorp
continued to post strong sales numbers for August while Tata Motors and Maruti
Suzuki sales languished. Maruti Suzuki sales were down 13% yoy partly due to
disruptions at the Manesar plant. The company could not meet the demand for Swift
due to quality issues at the Manesar plant and a two day strike in the month of August.
Hero Motocorp and M&M reported 19% and 27% yoy increase in sales in Aug 2011.
Hero Motocorp’s sales rise by 19% yoy but were in line with our expectations
Hero Motocorp reported a 19% yoy increase in two-wheeler sales while TVS Motors reported
14% yoy growth in volumes boosted by scooter (+28% yoy) and export sales (+39% yoy). TVS
Motors domestic motorcycle sales increased by 8% yoy losing market share to Hero Motocorp. We
expect Hero Motocorp to lose market share to Bajaj Auto in 2HFY2012E due to the launch of
Boxer 150cc.
Maruti Suzuki sales were impacted by disruptions at Manesar plant in August
Maruti Suzuki reported a 17% yoy decline in domestic volumes while export volumes rose
sharply—by 19% yoy to offset weak performance in the domestic market. The key reason for sub
par performance was the disruption at Manesar plant which impacted production of the new
Swift. Workers were on strike for only two days in August 2011 but Maruti could not deliver new
Swift as per demand to dealers because of quality issues. We reckon a total of 8,000-9,000 units
of production of new Swift were lost in month of August 2011.
August sales would have been inline with our expectations if Manesar production had gone as per
plan. Dzire volumes also declined by 8% yoy despite shifting of production to Gurgaon plant. We
reckon this could be due to capacity constraints/bottlenecks at Gurgaon plant due to recent
shifting of Dzire to the Gurgaon plant. Dzire’s waiting period has increased to 4-6 months due to a
shortage of vehicles. We believe the on-going tussle between workers at the Manesar plant and
Maruti Suzuki is a cause for concern and could impact Maruti’s market share as customers move
to competitors due to long delay in Swift/Dzire/SX4/Ritz models.
M&M continued to report very strong numbers in August as well. UV sales were up 14% yoy in
August while pick ups/Maxximo/Gio segment grew by 67% yoy. Tractor volumes rose by 19% yoy
in August 2011.
Weak passenger vehicle sales impact Tata Motors
Tata Motors reported a 3% yoy decline in volumes in August 2011. Domestic commercial vehicle
sales reported a 21% yoy growth in volumes driven by 27% yoy growth in LCV volumes and 12%
yoy growth in MHCV volumes. Domestic MHCV volumes have grown by 8% yoy between April-
Aug 2011 for Tata Motors holding up fairly well despite weak capex spending by corporates.
Domestic passenger car volumes declined by 34% yoy impacted by weak Nano volumes. Indica
volumes declined by 4% yoy while Indigo declined by 24% yoy in August 2011. Export volumes
declined by 18% yoy in August.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Automobiles
India
Another strong month for Hero and M&M. Mahindra and Hero Motocorp
continued to post strong sales numbers for August while Tata Motors and Maruti
Suzuki sales languished. Maruti Suzuki sales were down 13% yoy partly due to
disruptions at the Manesar plant. The company could not meet the demand for Swift
due to quality issues at the Manesar plant and a two day strike in the month of August.
Hero Motocorp and M&M reported 19% and 27% yoy increase in sales in Aug 2011.
Hero Motocorp’s sales rise by 19% yoy but were in line with our expectations
Hero Motocorp reported a 19% yoy increase in two-wheeler sales while TVS Motors reported
14% yoy growth in volumes boosted by scooter (+28% yoy) and export sales (+39% yoy). TVS
Motors domestic motorcycle sales increased by 8% yoy losing market share to Hero Motocorp. We
expect Hero Motocorp to lose market share to Bajaj Auto in 2HFY2012E due to the launch of
Boxer 150cc.
Maruti Suzuki sales were impacted by disruptions at Manesar plant in August
Maruti Suzuki reported a 17% yoy decline in domestic volumes while export volumes rose
sharply—by 19% yoy to offset weak performance in the domestic market. The key reason for sub
par performance was the disruption at Manesar plant which impacted production of the new
Swift. Workers were on strike for only two days in August 2011 but Maruti could not deliver new
Swift as per demand to dealers because of quality issues. We reckon a total of 8,000-9,000 units
of production of new Swift were lost in month of August 2011.
August sales would have been inline with our expectations if Manesar production had gone as per
plan. Dzire volumes also declined by 8% yoy despite shifting of production to Gurgaon plant. We
reckon this could be due to capacity constraints/bottlenecks at Gurgaon plant due to recent
shifting of Dzire to the Gurgaon plant. Dzire’s waiting period has increased to 4-6 months due to a
shortage of vehicles. We believe the on-going tussle between workers at the Manesar plant and
Maruti Suzuki is a cause for concern and could impact Maruti’s market share as customers move
to competitors due to long delay in Swift/Dzire/SX4/Ritz models.
M&M continued to report very strong numbers in August as well. UV sales were up 14% yoy in
August while pick ups/Maxximo/Gio segment grew by 67% yoy. Tractor volumes rose by 19% yoy
in August 2011.
Weak passenger vehicle sales impact Tata Motors
Tata Motors reported a 3% yoy decline in volumes in August 2011. Domestic commercial vehicle
sales reported a 21% yoy growth in volumes driven by 27% yoy growth in LCV volumes and 12%
yoy growth in MHCV volumes. Domestic MHCV volumes have grown by 8% yoy between April-
Aug 2011 for Tata Motors holding up fairly well despite weak capex spending by corporates.
Domestic passenger car volumes declined by 34% yoy impacted by weak Nano volumes. Indica
volumes declined by 4% yoy while Indigo declined by 24% yoy in August 2011. Export volumes
declined by 18% yoy in August.
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