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Automobile

Delhi Yatra: UV’s and Scooters in vogue

In our recent trip to Delhi, we attended SIAM Conclave, visited the Auto Expo and interacted with two-wheeler dealers across the OEMs.

Trip Key Takeaways:

m   SIAM Conclave: The OEMs, particularly in the passenger car segment, sounded pessimistic on volume growth (6-7% in FY13E driven by weak sentiments, higher interest rates and lack of clarity on fuel policy). The two-wheeler OEMs were confident about volume growth (12-13% in FY13E in the motorcycle and 20%+ in scooter segments driven by under penetration and cost effectiveness as a  mode of commutation). The CV players in turn expected volume growth to remain strong in the LCV segment (15-20% YoY - driven by low investment cost, last mile transport and under penetration). However, they expected 6-8% volume growth in the M&HCV segment in FY13E.

m   Visit to 2W Dealers: We visited two-wheeler dealers across OEMs. Currently no OEM is offering discounts on its product range (the only element of financing support was from Bajaj Auto which has reduced the financing rate to 9.9% from earlier 11.9%). TVS and Bajaj dealers indicated a price hike between 1-1.5% across their product range soon. The waiting period for HMSI Activa (there is no waiting period for motorcycles) has come down to about 10-15 days from 50 days earlier as production has begun at its new plant with a capacity of 0.6mn units (overall capacity will reach 2.8mn units by March 2012E and 4mn by 2HFY13E with equal split between scooters and motorcycles).

m  Auto Expo: The Auto Expo 2012 did not have many significant launches unlike at the previous Expo. There was some excitement in the UV/MPV and Scooters segments. Within the UV/MPV segment, MSIL showcased its MPV “Ertiga” and Ford its SUV “EcoSport”. While, the scoter segment saw a couple of launches including “Maestro” by HMCL – launch by Jan 2012 end, three models from Yamaha India “Mio”, “Fino” and “Xeon” and refurbished “Dio” with Activa engine by HMCL. Within the motorcycle segment HMCL showcased two models, 125cc “Ignitor” and 110cc “Passion ProX” while HMSI unveiled its mass market 110cc motorcycle Dream Yuga to be launched by May 2012.