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AUTO INDUSTRY VOLUME UPDATE - DECEMBER 2011
Trends in the monthly auto volumes reported by the OE's for the month of
December 2011 remained mixed. In the passenger car segment, players
having higher proportion of diesel car sales reported growth while petrol
car sales continue to suffer on account of weak demand. M&HCV sales
remained impacted on account of slowdown in industrial activity in the
economy. However LCVs continued to grow at a robust pace. 2W sales
started feeling the pressure of economic slowdown. Among the companies,
TAMO and M&M posted strong numbers whereas Bajaj Auto and TVS Motors
reported weak dispatch figures. Going ahead we expect LCV and diesel car
segment to outperform other segments within the auto industry.
HERO MOTOCORP (HMCL)
n HMC December 2011 remained strong which was in stark contrast to the numbers
reported by Bajaj Auto and TVS Motors.
n HMC dispatched 540,276 units (which is one of their highest ever) in relatively
weak December month. However last year higher base led to mere 8% YoY
growth that was below YTD growth rate of 18%.
n HMC's higher exposure to rural areas and high proportion of cash sales has
helped the company outperform the peers in a relatively weak FY12.
n While the overall sales in the 2W space is witnessing some slowdown, we expect
HMC to continue their outperformance over the balance part of FY12.
n Company's YTD sales growth stands at 18% as against our full year assumption
of 17.3%.
BAJAJ AUTO LTD (BAL)
n BAL's December month dispatch figures were below expectations and their lowest
in the past 12 months.
n Company's wholesale volumes at 305,690 units grew by 10% YoY on a weak
December 2010 base. Volumes were weak on couple of counts 1.Poor retail demand
and 2.Plant shut down for 4-5 days.
n Sequentially volumes dropped by 18%.
n Company claims that retail domestic motorcycle sales have turned weak and the
same were reflected in the wholesale numbers. Company expects pressure on
the domestic sales to continue in the near term.
n 3W sales remained healthy at 41,991 units, a YoY growth 26.8%.
n Exports at 119,708 units grew by 25.5% YoY but were still a cause of concern as
the company's exports are down sequentially for the fourth month in a row.
n Company expects to close the year will volumes of ~4.4 million units. Accordingly
the company will have to average ~355,000 units on a monthly basis in
4QFY12 to achieve that target.
n Company's FY12 YTD sales growth stands at 16% as against our full year expectation
of 16.6%.
TVS MOTORS (TVSM)
n TVS Motors reported weak December sales figures and the same were below
expectations. Overall slowdown in the 2W sales (primarily the motorcycle sales)
led to 1% YoY decline in volumes.
n TVSM reported dispatch figures of 170,428 units in December 2011 as against
171,859 units dispatched in December 2010.
n Scooter demand remained relatively better than motorcycles demand. Company
reported 7% growth in scooter volumes that stood at 44,804 units.
n Motorcycles volumes de-grew by 8% from 61,404 units in December 2010 to
56,662 units for the period under review.
n Moped sales grew by a mere 2% YoY signaling towards probable weakening of
rural demand.
n 3W sales also remained weak with the company reporting 2,523 units.
n Exports for December 2011 stood at 21,158 units, a YoY growth of 11%.
n Company's monthly volumes have been below expectations for the second consecutive
month in a row due to weakening 2W demand.
n TVSM's FY12 YTD volume growth stands at 11% as against our full year growth
expectation of 13.5%. We believe the company will find it very difficult to
achieve their expected 15% volume growth target for FY12.
MARUTI SUZUKI INDIA LIMITED (MSIL)
n MSIL overall sales in December 2011 were in line with expectations with the
company reporting 7% YoY decline. While domestic sales de-grew by 13%, exports
sales grew by a robust 51% YoY.
n Plants in December 2011 were closed for 6 days as part of the company's biannual
maintenance schedule. Given poor demand, we do not believe the shutdown
to have impacted the dispatches in a major way for the company.
n Sales in the mini car segment (that consists models like M-800, Alto, A-star and
Wagon R) was down by 16% YoY clearly signifying the steep decline in demand
for petrol driven cars.
n Sales in the compact segment (that includes Swift) remained flat largely on account
of strong demand for diesel models.
n Dzire sales were higher by 7% YoY primarily driven by strong demand for diesel
models.
n High petrol prices have impacted the company sales in the van segment. Sales
of Omni and Eeco were down by 42% YoY. Sales for the company in this segment
have declined YoY for six consecutive months.
n Export sales surprised positively with a 51% YoY growth. Exports at 14,686 units
were the highest since June 2010.
n Going ahead, we expect the sales to improve in absolute numbers as the
company's enhanced diesel engine capacity comes in play. Further the company
is also in the process of acquiring additional diesel engines from Fiat.
n Despite that, we believe the company to report YoY decline in sales in 4QFY12.
Company's YTD sales have declined by 18% as against our full year assumption
of 15%.
MAHINDRA AND MAHINDRA (M&M)
n M&M continued to post strong set of monthly dispatch figures in their automotive
division. However tractor sales remained flat.
n M&M's domestic automotive sales grew by a healthy 23% YoY from 32,546
units in December 2010 to 39,891 units in December 2011.
n Passenger vehicle sales grew by 24% YoY helped by strong demand for diesel
vehicles that has remained intact in the current slowing economic environment
n Buoyancy continued in the LCV space where the company reported 35.4% YoY
jump in volumes. Company's YTD performance in this segment stand at a whopping
50% and has been the prime reason for the overall strong volume growth in
the current financial year.
n 3W sales though remained a tad weak for M&M.
n Exports grew on a strong note though the same accounts for 7% of the
company's automotive sales.
n Tractor sales remained almost flat in December 2011. Company's tractor sales
have remained weak over the past couple of months and the same is pointing
towards a probable slowing tractor demand.
n Going ahead, we expect the company to continue posting strong volumes in the
automotive division.
TATA MOTORS (TAMO)
n Tata Motors December 2011 dispatches grew by 22% from 67,441 units in December
2010 to 82,278 units for the period under consideration.
n Passenger car segment grew at a strong 40%. In the past couple of months the
passenger car sales have registered healthy growth after declining in the first
seven months of the current financial year.
n UV segment that contributes around 7% of domestic volumes grew by 90%.
n LCV segment that has been a strong performer for the company in FY12 continued
its healthy show by rising 20% YoY. In the current weak economic environment,
the LCV segment has grown on a strong note.
n Slowing economic activity and weak IIP numbers led to a mere 5% YoY growth
in the M&HCV segment for TAMO. Sequentially though volumes were up by
14%.
n Exports declined by 3.3% from 5,809 units to 5,615 units.
n Company's FY12 YTD volume growth stands at 10.5%. Going ahead we expect
the growth rate in 4QFY12 to be in single digit for TAMO.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
AUTO INDUSTRY VOLUME UPDATE - DECEMBER 2011
Trends in the monthly auto volumes reported by the OE's for the month of
December 2011 remained mixed. In the passenger car segment, players
having higher proportion of diesel car sales reported growth while petrol
car sales continue to suffer on account of weak demand. M&HCV sales
remained impacted on account of slowdown in industrial activity in the
economy. However LCVs continued to grow at a robust pace. 2W sales
started feeling the pressure of economic slowdown. Among the companies,
TAMO and M&M posted strong numbers whereas Bajaj Auto and TVS Motors
reported weak dispatch figures. Going ahead we expect LCV and diesel car
segment to outperform other segments within the auto industry.
HERO MOTOCORP (HMCL)
n HMC December 2011 remained strong which was in stark contrast to the numbers
reported by Bajaj Auto and TVS Motors.
n HMC dispatched 540,276 units (which is one of their highest ever) in relatively
weak December month. However last year higher base led to mere 8% YoY
growth that was below YTD growth rate of 18%.
n HMC's higher exposure to rural areas and high proportion of cash sales has
helped the company outperform the peers in a relatively weak FY12.
n While the overall sales in the 2W space is witnessing some slowdown, we expect
HMC to continue their outperformance over the balance part of FY12.
n Company's YTD sales growth stands at 18% as against our full year assumption
of 17.3%.
BAJAJ AUTO LTD (BAL)
n BAL's December month dispatch figures were below expectations and their lowest
in the past 12 months.
n Company's wholesale volumes at 305,690 units grew by 10% YoY on a weak
December 2010 base. Volumes were weak on couple of counts 1.Poor retail demand
and 2.Plant shut down for 4-5 days.
n Sequentially volumes dropped by 18%.
n Company claims that retail domestic motorcycle sales have turned weak and the
same were reflected in the wholesale numbers. Company expects pressure on
the domestic sales to continue in the near term.
n 3W sales remained healthy at 41,991 units, a YoY growth 26.8%.
n Exports at 119,708 units grew by 25.5% YoY but were still a cause of concern as
the company's exports are down sequentially for the fourth month in a row.
n Company expects to close the year will volumes of ~4.4 million units. Accordingly
the company will have to average ~355,000 units on a monthly basis in
4QFY12 to achieve that target.
n Company's FY12 YTD sales growth stands at 16% as against our full year expectation
of 16.6%.
TVS MOTORS (TVSM)
n TVS Motors reported weak December sales figures and the same were below
expectations. Overall slowdown in the 2W sales (primarily the motorcycle sales)
led to 1% YoY decline in volumes.
n TVSM reported dispatch figures of 170,428 units in December 2011 as against
171,859 units dispatched in December 2010.
n Scooter demand remained relatively better than motorcycles demand. Company
reported 7% growth in scooter volumes that stood at 44,804 units.
n Motorcycles volumes de-grew by 8% from 61,404 units in December 2010 to
56,662 units for the period under review.
n Moped sales grew by a mere 2% YoY signaling towards probable weakening of
rural demand.
n 3W sales also remained weak with the company reporting 2,523 units.
n Exports for December 2011 stood at 21,158 units, a YoY growth of 11%.
n Company's monthly volumes have been below expectations for the second consecutive
month in a row due to weakening 2W demand.
n TVSM's FY12 YTD volume growth stands at 11% as against our full year growth
expectation of 13.5%. We believe the company will find it very difficult to
achieve their expected 15% volume growth target for FY12.
MARUTI SUZUKI INDIA LIMITED (MSIL)
n MSIL overall sales in December 2011 were in line with expectations with the
company reporting 7% YoY decline. While domestic sales de-grew by 13%, exports
sales grew by a robust 51% YoY.
n Plants in December 2011 were closed for 6 days as part of the company's biannual
maintenance schedule. Given poor demand, we do not believe the shutdown
to have impacted the dispatches in a major way for the company.
n Sales in the mini car segment (that consists models like M-800, Alto, A-star and
Wagon R) was down by 16% YoY clearly signifying the steep decline in demand
for petrol driven cars.
n Sales in the compact segment (that includes Swift) remained flat largely on account
of strong demand for diesel models.
n Dzire sales were higher by 7% YoY primarily driven by strong demand for diesel
models.
n High petrol prices have impacted the company sales in the van segment. Sales
of Omni and Eeco were down by 42% YoY. Sales for the company in this segment
have declined YoY for six consecutive months.
n Export sales surprised positively with a 51% YoY growth. Exports at 14,686 units
were the highest since June 2010.
n Going ahead, we expect the sales to improve in absolute numbers as the
company's enhanced diesel engine capacity comes in play. Further the company
is also in the process of acquiring additional diesel engines from Fiat.
n Despite that, we believe the company to report YoY decline in sales in 4QFY12.
Company's YTD sales have declined by 18% as against our full year assumption
of 15%.
MAHINDRA AND MAHINDRA (M&M)
n M&M continued to post strong set of monthly dispatch figures in their automotive
division. However tractor sales remained flat.
n M&M's domestic automotive sales grew by a healthy 23% YoY from 32,546
units in December 2010 to 39,891 units in December 2011.
n Passenger vehicle sales grew by 24% YoY helped by strong demand for diesel
vehicles that has remained intact in the current slowing economic environment
n Buoyancy continued in the LCV space where the company reported 35.4% YoY
jump in volumes. Company's YTD performance in this segment stand at a whopping
50% and has been the prime reason for the overall strong volume growth in
the current financial year.
n 3W sales though remained a tad weak for M&M.
n Exports grew on a strong note though the same accounts for 7% of the
company's automotive sales.
n Tractor sales remained almost flat in December 2011. Company's tractor sales
have remained weak over the past couple of months and the same is pointing
towards a probable slowing tractor demand.
n Going ahead, we expect the company to continue posting strong volumes in the
automotive division.
TATA MOTORS (TAMO)
n Tata Motors December 2011 dispatches grew by 22% from 67,441 units in December
2010 to 82,278 units for the period under consideration.
n Passenger car segment grew at a strong 40%. In the past couple of months the
passenger car sales have registered healthy growth after declining in the first
seven months of the current financial year.
n UV segment that contributes around 7% of domestic volumes grew by 90%.
n LCV segment that has been a strong performer for the company in FY12 continued
its healthy show by rising 20% YoY. In the current weak economic environment,
the LCV segment has grown on a strong note.
n Slowing economic activity and weak IIP numbers led to a mere 5% YoY growth
in the M&HCV segment for TAMO. Sequentially though volumes were up by
14%.
n Exports declined by 3.3% from 5,809 units to 5,615 units.
n Company's FY12 YTD volume growth stands at 10.5%. Going ahead we expect
the growth rate in 4QFY12 to be in single digit for TAMO.
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