Auto Sales Data & Analysis Sep 2019
- 1. AUTO SALES DATA ANALYSIS SEP-2019
- 2. Automobile sector delivered a subdued volume performance across segments in Sep’19 but it was much better if we compare them over August due to heavy discounts and beginning of the festive season like Navratri, Onam and Ganesh Chaturthi with signs of a seasonal recovery in 2Ws and PVs but sustained weakness in CVs. In PV on MoM basis sales of MM / TTMT improved by 6% /11% respectively and in 2W total sales of 16,45,614 units in Sep’19 while 20,56,899 units were sold in Sep’18. This implies a 12.4% decline on YoY basis and 7.1% increase over sales in Aug’19 when sales stood at 4,25,664 units. In MHCV sales for TTMT/ AL declined 69% / 67%YoY and further 5% / 11% MoM. Consumers delayed purchases, pinning hopes on GST rate cut but with announcement of corporate tax reduction, possibility of GST rate cut on autos was ruled out. Auto Sales Sep’19..Weak Trends Continue.. Festive season will be the key.. Snapshot of volumes for Sep-19 (incl. exports) 136108 89,023 225131 91,292 44,187 36,914 81,101 48,198 81,926 60,298 142224 84,703 18,034 21,979 40,013 18,852 93,276 70,597 163873 87,795 17,799 25,764 43,563 47,866 0 50000 100000 150000 200000 250000 Cars Uvs+MPVs Total PVs 3Ws M&HCVs LCVs Total CVs Tractors Sep-18 Aug-19 Sep-19
- 4. Passenger Vehicles Market share and Sep’19 Sales analysis: PV volumes were weak for the 15th consecutive month due to sentimental negativity, high dealer inventory, and credit crunch resulting in weak YoY growth. Most of the auto makers took temporary shutdowns at their plants to prudently align production with sales. However, couple of new launches led to a strong bounce back sequentially, as well as the YoY decline was not as bad as expected. With the heavy discounts on offer, there has been an improvement seen in the footfalls which should hopefully translate to retail sales as the festive season begins. MSIL and Tata Motors' domestic passenger vehicle market share declined due to drop in sales of utility vehicles in Apr-Aug 19, while Hyundai and M&M witnessed gain in the same period, as per data compiled by industry body SIAM. 52.16% 6.79% 15.59% 6.89% 4.63% 5.48% 2.81% 1.14% 49.84% 5.41% 18.36% 8.08% 4.86% 4.64% 2.70% 1.61% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% MSIL Tata Motors Hyundai M&M Toyota Honda Ford Others Passenger Vehicles Market share Apr-Aug 2018 Apr-Aug 2019
- 5. 4-WHEELERS: Maruti Suzuki (MSIL) In Units Sep 2018 Aug 2019 Sep 2019 Growth in MoM% Growth in YoY% Mini 34,971 10,123 20,085 98.4 -42.6 Compact 74,011 54,274 57,179 5.4 -22.7 Mid-size 6,246 1,596 1,715 7.5 -72.5 MUVs 21,639 18,522 21,526 16.2 -0.5 Vans 14,645 8,658 9,949 14.9 -32.1 LCV (Carry) 2,038 1,555 2,046 31.6 0.4 Sales to OEMs - 2,333 2,952 26.5 - Total domestic sales 153,550 97,061 115,452 18.9 -24.8 Total exports 8,740 9,352 7,188 -23.1 -17.8 Total Sales 162,290 106,413 122,640 15.2 -24.4 MSIL delivered highly subdued performance in Sep’19 with a decline of 24% YoY and (+15% MoM, despite incremental volume of new S-Presso. Its UV volume remained flat on YoY basis and grew by 16% MoM due to launch of new XL6. Shifting of segment of new WagonR from Mini to Compact impacted the segmental sales. MSIL shut down the PV manufacturing operations of Gurugram plant and Manesar plant in Haryana for two days on September 7 and 9. New Products Launched – Alto 800, Baleno, WagonR (1.2-litre), Swift, Dzire, Ertiga and the recently launched XL6 and S-Presso.
- 6. M&M’s key volume contributor i.e. PV segment – comprising of UV, MPV and PCs – fell by 33% YoY and (+6% MoM) owing to incremental volume from XUV300 and Marazzo. M&M continues to face strong competition in the UV segment (Venue by Hyundai, XL6 by Maruti), as market continues to shift towards compact SUVs. Going forward, we expect volume growth in tractors to slow down on a high base; additionally, it has been losing market share in the segment. New Products Launched – Ekuv100, XUV Aero, THAR 2020 Mahindra & Mahindra 19,885 1,526 21,223 630 1,064 13,037 470 13,855 475 354 13,858 475 17,998 466 408 0 5,000 10,000 15,000 20,000 25,000 Utility vehicles Car+Vans LCV<3.5T LCV>3.5T MHCV Sep-18 Aug-19 Sep-19 M&M Sales Sep-19 Growth MoM% Growth YoY% Utility vehicles 6.3% -30.3% Car+Vans 1.1% -68.9% LCV<3.5T 29.9% -15.2% LCV>3.5T -1.9% -26% MHCV 15.3% -61.7%
- 7. Tata Motors Sales Growth MoM% Growth YoY% Domestic M&HCV Trucks -5 -68.7 Domestic I&LCV 11.9 -35.4 Domestic SCV 22 -31.9 Domestic Buses -4 -49.4 Domestic CVs 11 -47 Domestic PV 11 -56.1 Tata Motors’ Jaguar Land Rover (JLR) retail sales for the quarter ending 30 September 2019 were 128,953 vehicles, slightly down (-0.7%) compared to the same period a year ago. These results reflect an encouraging recovery of JLR retail sales in China (up 24.3%), with a third consecutive month of double-digit sales growth for the company in the region. Sales were also up slightly in Europe (+0.9%), offset by lower sales in the US (-1%), UK (-5.1%) and in overseas markets (-19.2%). Tata Motors’ M&HCV truck segment witnessed ~69% YoY fall to 5,082 units. Volumes remained stressed, as operator profitability remained under pressure, even though freight-carrying capacity increased. The addition in capacity further negatively exacerbated the freight demand-supply gap. It will also launch cars like Harrier 7-seater, Hornbill micro-SUV and electric cars in the coming months. Tata Motors16,239 5,465 19,846 4,271 45,821 18,429 5,340 3,152 11,082 2,250 21,824 7,316 5,082 3,528 13,510 2,159 24,279 8,097 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Domestic M&HCV Trucks Domestic I&LCV Domestic SCV Domestic Buses Domestic CVs Domestic PV Sep-18 Aug-19 Sep-19
- 8. Ashok Leyland CV Sales In Units MoM% YoY% MHCV -25 -72 LCV -2 -26 Total -15 -60 Movement of truck fleets got impacted by floods in several states, which, in turn, cut the arrival of fruits and vegetables in the Agricultural Produce Market Committees (APMCs). At the same time, factory gates at most of the industrial clusters turned in 25 to 30% lesser goods. The company said on September 3 that its heavy-duty trucks range had been upgraded to meet BS-VI emission norms, which come into force from April 1, 2020. In Sept, Ashok Leyland announced 16 non-working days in Ennore, five days at Hosur (Tamil Nadu) unit, 10 days each in Alwar (Rajasthan) and Bhandara (Maharashtra) unit and 18 days in Pantnagar (Uttarakhand) facilities. It announced the firm would observe non-working days in plants at various locations for 2-15 days in October. Ashok Leyland 4,035 3,816 7,851 14,232 5,141 19,373 5,349 3,882 9,231 0 5,000 10,000 15,000 20,000 25,000 CV (ex-DOST) SCV (DOST) Total Sep-19 Sep-18 Aug-19
- 10. Two-Wheelers Sales Volume Analysis For 2W sales, festive season will be the main factor to look at. Implementation of ABS and CBS on 2Ws has increased the prices of vehicles and is also one of the main reasons why the 2W demand has softened. We believe this to settle down soon. A good monsoon, encouraging festive season, low base of last year’s H2 may lift up the sector. Given the BSVI deadline of April 2020, we see a distinct possibility of higher discounting being used to clear BSIV inventory in Q4, if sales fail to pick up during the festive season. 2W Sales Sep-19 Growth MoM% Growth YoY% 12% -20% 2,056,866 1,472,766 1,645,615 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Total 2Ws Sep-18 Aug-19 Sep-19
- 11. HEROMOTOCORP 2W Sales Growth MoM% Growth YoY% 13% -20% HMCL’s sales in September went down by 21% on YoY basis due to higher dealer level inventory stemming from NBFC issues, lower retail demand, weaker sentiments, increase in ABS related costs, rural distress and stifling competition. However, sequentially there has been strong improvement of 12.7% which may indicate a possible recovery. Good monsoons may also have contributed to strong MoM sales. HMCL’s bike performance got impacted by Bajaj Auto’s aggressive pricing policy for the entry-level bikes. The Company launched a slew of new products in scooter and motorcycle segments during past 6 months to regain lost market shares. The company’s Upcoming Launches: Scooter ZIR150, - Nov 2019; Dare125 & Duet-E. – Dec 2019 HERO MOTOCORP (HMCL) 769,138 543,406 612,204 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 Total 2Ws Sep-18 Aug-19 Sep-19
- 12. Bajaj Auto 2W Sales MoM% YoY% 3.5% -21.9% Bajaj Auto reported drop of 21.9% y-o-y led by the 35% drop witnessed in the domestic space as discounts were at all-time high with BJAUT offering up to Rs. 7,200 savings on few models. Exports declined 2% YoY, with motorcycles witnessing 1% YoY volume growth, mainly due to decline in demand in key export markets of Africa (Nigeria). Its 2W volumes declined due to weak sentiment, majorly due the high base of sales last year & high channel inventory in the domestic market. Bajaj will launch the Urbanite e-scooter on October 16, rivaling the all-electric two-wheelers from Ather, Okinawa and 22 Motors. Bajaj Auto 430,939 325,300 336,730 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 Motorcycle Sep-18 Aug-19 Sep-19
- 13. TVS MOTORS’ both, 2W sales were below expectations. No discounts are being offered in TVS products. Peers such as both Honda and Hero are offering discounts in form of free accessories, cashback, lower interest rates, lower down-payment, etc. Mopeds continued to drag overall performance at TVS motors, continued their downward trend, registering double-digit decline. New Launches: TVS Apache RTR 310, TVS Apache RTR 200 4V, TVS Zeppelin, TVS Creon Dealer inventory stands at ~30 days. However, most TVS dealers have higher inventory days at 40-50. TVS Motors 166,489 101,645 142,562 410,696 109,393 57,186 109,272 275,851 123,921 58,301 118,687 300,909 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 Motorcycles Mopeds Scooters total Sep-18 Aug-19 Sep-19 TVS Motor Sales Growth MoM% Growth YoY% Motorcycles 6.3% -30.3% Mopeds 1.1% -68.9% Scooters 29.9% -15.2% total -1.9% -26%
- 14. Eicher Motors 2W Sales MoM % YoY % 13% -17% Eicher Motors’ volumes fell YoY due to sharp price hike and slowdown in the segment, that have caused volumes to remain under pressure. Considering the current dull market conditions, we expect short-term push to volumes, spurred by the festive season, recent price cut of Rs 10,000 on the base model and opening of 250 small stores. However, a sharp ~15% price hike to factor in regulatory issues (insurance, ABS) have hurt RE’s volume growth, at a time when the company is increasingly aligned to industry growth rates, especially given its relatively high market share. The 650 Twins model continue to do extremely well in India as well as across international markets and has a waiting period of 3-4 months. Eicher Motors 59,500 71,663 52,904 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 Royal Enfield Sep-19 Sep-18 Aug-19
- 16. 3W Sales Growth MoM% Growth YoY% TVS MOTORS 2.7 13.0 M&M 39.3 7.9 BAJAJ AUTO 0.9 -8.1 Three Wheelers Sales Analysis BAJAJAUTO’S total three wheeler sales went down by 8.1% YoY. In the domestic markets they decreased by 0.9% yoy in the absence of any permits opening. Exports markets sales de-grew by regulatory changes in market Egypt and issues in Sri Lanka led to this fall. These weaknesses more than offset decent performances in Bangladesh and Nepal. TVSMOTORS’s 3W sales increased by 13% yoy on strong exports performance. 15,003 7,487 65,305 87,795 13,282 5,373 71,070 89,725 14,604 6,940 64,726 86,270 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 TVS Motor M&M Bajaj Auto Total Sep-19 Sep-18 Aug-19
- 18. Tractor Segment Sales Analysis Tractor Sales MoM% YoY% M&M 149.9% -1.5% Escorts 169% 2.2% Tractor segment turned marginally positive after recording a decline for 7 consecutive months. Inventory has increased by ~1-2 weeks by most auto players as a preparation for the upcoming festive season. Driving the positive trend were increase in crop prices and strong monsoon. The dismal rural sentiments took a U-turn, at least in some of the states like Maharashtra and Madhya Pradesh, with the above normal rainfall in the second half of the just concluded monsoon season. Both manufacturers and dealers are sanguine that robust yield in key agrarian regions will compensate for the crop damage happened in Bihar and Odisha due to floods. 37,581 10,617 14,817 4,035 37,011 10,855 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 M&M Escorts Sep-18 Aug-19 Sep-19
- 19. Key Announcements : The Goa government announced to slash road tax by 50% on purchase of any type of new vehicles for a period of three months, till December 31. As per state Transport Department data, the overall registration of vehicles in Goa during the first four months of the current financial year declined by 15-17%. The government has modified electric vehicle charging station norms to let developers choose charging technologies depending on the market demand thus ensuring that the public charging station (PCS) owners have the freedom to install the chargers as per the market requirement. Tamil Nadu is working on feasibility studies across locations including Chennai, Coimbatore, Hosur and other southern cities with an aim to develop electric vehicle (EV) and component factory clusters, according to a top government official. German auto components major Bosch India has decided to shut production for 10 days per month in the third quarter (October-December) of fiscal 2019-20 due to slowdown. Bajaj and KTM Industries AG have agreed on new electric vehicle alliance. The production will begin at Bajaj’s production location in Pune and there are plans to launch a range of electric 2Ws by FY22. TVS Motor Company has had its application rejected for a patent on a new two-stroke internal combustion engine. It had claimed this would pollute less, with better fuel efficiency. However, the application has been rejected by the Indian Patent Office. Tata Motors owned Jaguar Land Rover will bring in half a dozen electrified vehicles in India starting 2020, as the government of India pushes towards cleaner mobility solutions in the country with pollution on the rise. The range of cleaner vehicles lined up for India is part of a new direction “Destination Zero” which aims towards zero fatality, zero emission, zero congestion to develop a safe and a cleaner environment for the future.
- 20. Although auto sales during Sep’19 have demonstrated MoM improvement and Oct’19 sales are likely to follow a similar trend, it will be too early to call for a demand recovery. With initial signs of a recovery in inquiries, a good festive season will help salvage 2HFY20 volumes and clear BS4 inventory. BS6 transition will keep volumes volatile until 1HFY21. Also the corporate rate tax cut can boost sentiments but would surface once the other dominating factors are also in place. OEMs (original equipment manufacturers) are expected to pass on some benefits of tax revision to the end consumers. This implies that the price correction in coming months will to an extent address the demand side issues. There could be some hope and positivity built in for revival of sales based on factors like increasing discounts, better rural sentiment, lower interest rates, higher govt spending and a possible introduction of the scrappage policy. Our view
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