Sep'11 Sales: Domestic sales trend diverges as car sales decline; global luxury car sales growth is driven by China ::JPMorgan

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 Mixed sales trend continued: Sales trends: Passenger car sales
continued to remain weak with growth declining -0.6% yoy (+0.6%
YTD) given weak consumer sentiments; while commercial vehicle sales
were up +19% yoy vs. +19% YTD (driven by light trucks +37% yoy;
heavy commercial vehicle sales are up +2% yoy) and two wheeler sales
were up +24% vs. + 17% YTD.
 Key data points on market share: Maruti continued to cede market
share to competition (-670bp YTD) in the passenger car segment, Tata
Motors has gained (+110bp) market share in the commercial vehicle
segment. Hero Honda gained share in the domestic motorbike segment
(+230bps YTD).
 Global luxury sales are tepid, sales growth driven by US, China: In
September, luxury brands Audi, BMW, and Mercedes-Benz reported y/y
growth of +17%, +9%, and +2% respectively. Audi's growth was driven
by strong sales in China +33% yoy while US sales grew 19%. BMW saw
20% growth yoy in China while US sales were up 19% yoy. Mercedes
saw China sales grow 14% yoy, while US sales grew at 9% yoy.
 Split wide open: SIAM revised down its forecasts for passenger car
growth rate forecasts to 2%-4% for FY12 vs. earlier forecasts of 10%-
12%. The association raised forecasts for two wheelers and commercial
vehicles to be 13%-15% vs. 12%-14% earlier.
 The auto sector (-1% mom) largely performed in line with a falling
Sensex (-2% mom) during the month. Tata Motors outperformed the
Sensex (+13%) given encouraging consumer response to the ‘Evoque’.
We are OW on M&M and Tata Motors.