Light After Dark – July Vehicle Sales Report

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Three things happened in July 2014 – first, passenger vehicle sales were exceptionally strong for a few carmakers; second, HCVs sales are finally turning around; and third, the Harley Street 750 beat the REML Continental GT.

But first the passenger vehicles…

Passenger Vehicle Sales – Vans Brake Accelerating UVs.

In a way, the story from June was rehashed in July as well. Passenger Cars dispatches went up by 5%, Vans segment came down by 8% and the Utility Vehicles segment gained the most, growing by 18.6% in July. Overall, the Passenger Vehicles segment grew by 7% in July 2014 on a year-on-year basis.

Passenger Cars dispatches in July 2014 numbered 137873 units, a 5.04% growth from July 2013’s low base of 131257 units. Despite the growth, July 2014 dispatches were significantly lower than July 2012 (143496 units), July 2011 (134473 units) or the peak dispatches of 158764 units in July 2010.

Vans still drag even as Passenger Vehicles stage a recovery (Click on images to enlarge)

Vans still drag even as Passenger Vehicles stage a recovery (Click on images to enlarge)

Numbers were helped by stellar performances from Maruti-Suzuki, Hyundai and Honda. While the two market leaders benefitted from a mix of new products and a low base from July 2013, Honda benefitted from the City, the dispatches of which stay consistently high, making it a qualified success.

The Small SUV (UV1 segment) has been one of the genuine successes amidst the lowdown of the last six quarters. The success of the Ford EcoSport, Renault Duster, Nissan Terrano and Maruti-Suzuki Ertiga propelled overall UV dispatches to 44945 units in July 2014. This represented a 18.6% improvement from July 2013 and was the best July ever, even edging out July 2012 dispatches of 44878 units.

However, the Vans segment continues to be a laggard. Dispatches were down 8.02% from July 2013 and were only marginally better than July 2012 dispatches of 16595 units. However, the numbers were significantly lower than July 2011 dispatches of 21089 units and even July 2010 dispatches of 18436 units.

A weak monsoon continues to cast its shadow over vehicle sales even as the industry is looking at the first green shoots after the eighteen months (Dec 2012 – May 2014) of slowdown. However, it is worrying that the recovery is led by only a few leading carmakers while the other behave like they are playing in the passenger vehicles market of Zimbabwe.

Micro-, Mini- & Compact Segment

Looking at the performance in the biggest segments, it is clear that a low base fresh looks are key to delivering growth. Maruti-Suzuki (MSIL) improved dispatches by 13.58% riding the Celerio while Hyundai India’s dispatches were up nearly 18%, making this the best July ever for the company in these segments.

Leaders lead and nearly everyone else has a bad month again

Leaders lead and nearly everyone else has a bad month again

Last month’s spike in Mini segment for MSIL, riding attractive discount schemes, has tapered down in July. The company’s numbers declined in the Mini segment but it made up for it with growth in the Compact segment. MSIL also benefitted from a low base effect as last year the company had dispatched a little above 13000 units in the Compact segment in July 2013. In normal months, MSIL does more than 20000 units in the Compact segment every month.

Despite the overall growth in the segments, MSIL numbers were still lower than the July 2010 best of 65759 units.

The surprising winner in the segments was Volkswagen, which improved dispatches of the Polo by 11.67%. However, at 2717 units, Polo dispatches last month were still lower than July 2012 dispatches of 3498 units and July 2011 dispatches of 3507 units.

The surprising loser was Honda, which saw Amaze-Brio dispatches reduce by half. We feel this is a temporary phenomenon triggered by either making space for the Mobilio on the assembly line, components shortage, or a temporary inventory pile-up at the dealers. Dispatches should be back to normal next month.

The Brio was especially pummeled last month with Honda dispatching only 74 of the Compact hatchbacks in July 2014. While Brio sales have been weak for some time since the launch of the Amaze, 74 was a new low by far. We would be keenly watching numbers in the near future to see if this was a one-off or the harbinger of death for the hatch.

While Nissan-Datsun sales were up 41% in July, statistics don’t show the holes in the underwear entire picture. Between the Micra and the Go, Nissan-Datsun dispatched all of 1168 units in July. This is even lower than what the Micra managed in July 2011 (1550 units).

Slice this data any way, the bottomline is the same – the much-hyped Go is not selling. If not corrected anytime soon, this has the potential to jeopardize the future of the Datsun brand in India.

Sister-brand Renault is also facing extinction in the biggest segments in the market with Pulse dispatches at 93 units in July, making this the worst July ever, even with Renault’s humble standards.

Amongst the other carmakers witnessing declines in dispatches, the usual suspects – GM and Tata – did not surprise. Both witnessed high double-digit declines in dispatches. Tata dispatches were down 21% in July 2014 at 6559 units. This makes this the worst July in the last six years for the company in the segments. Nano dispatches touched a new low of 875 units as the Twist has seemingly lost its magic.

General Motors India dispatched all of 2060 units in the entry-level segments, a 36% decline from July 2013 dispatches. It is worth noting that July 2013 dispatches were down 35% from July 2012, which in turn were down 27%…you get the point? July 2014 was the worst in the last six years for the company.

Amongst the other notable OEMs reporting declines in dispatches were Ford, which saw dispatches of the Figo go down by 43% to 1519 units, again the worst numbers for the company in the last five years.

Fiat witnessed a 23% decline in Punto dispatches at 554 units; Toyota Liva dispatches were down 5.5% at 1982 units and Mahindra Vibe dispatches collapsed 75% to 168 units.

In short, nothing was selling apart from the leading models in the segments.

Super Compact & Midsize segments

MSIL has a super-success in the DZire – the Super Compact sedan has caught the fancy of customers across large cities to small towns. Even the success of the Amaze has not slowed down the D’Zire, with the Chevrolet Sail and Tata Indigo absorbing the Amaze’s brunt.

MSIL dispatched 18867 units of the DZire (and SX4) in July 2014, a 21% jump over July 2013 volumes, making this the best July ever for the company in the Super Compact & Midsize segments.

Honda City and Maruti-Suzuki D"Zire continue to blaze a trail

Honda City and Maruti-Suzuki D”Zire continue to blaze a trail

Honda City continues to sell well in the mid-size segment as the company dispatched 7705 units in July 2014, three-times previous year numbers.

Also gaining last month was the Sunny with 515 units dispatched, a 40.3% jump from July 2013 dispatches of 367 units. Sunny’s gains are mostly due to a low-base effect as the car had managed 2436 units in dispatches in July 2012.

Ford also did well with the Classic dispatches in July 2014, shifting 642 units to showrooms, a 54.3% year-on-year improvement.

Apart from MSIL, Honda, Ford and Nissan, everyone reported a decline in Super Compact & Midsize dispatches in July 2014. Hyundai Verna dispatches were down 18% at 2853 units, the third successive year of decline from the peak of July 2011; Tata Indigo Manza dispatches touched a new low of 144 units, down 34.6% from last July; General Motors dispatched 517 units, down 34.5%; Mahindra dispatches were down 42% at 199 units; Skoda dispatched 756 units of the Rapid, a decline of 30%; Toyota dispatches were down 34 at 1769 units; Renault dispatches were down 76% at 89 units and Volkswagen dispatched 529 units of the Vento, down 72% from last year.

Big Story – Return of the B&M&HCVs

July 2014 was also a good month for HCV sales as both the HCVs – Rigid vehicles, and HCVs – Trailers segments registered improvement in shipments. The HCV – Rigid Axles segment saw a 11.3% improvement in orders in July 2014 at 7258 units. While Tata and VECV gained in volumes, Ashok Leyland led in the growth, improving dispatches by 29% at 2138 units.

Infrastructure projects seem to be reviving as demand for HCVs - Rigid Axles improves

Infrastructure projects seem to be reviving as demand for HCVs – Rigid Axles improves

Dispatches in the HCV-Trailers segment improved, albeit from a small base. At 2284 units, dispatches were up 133% from July 2013 levels. Both Tata and Ashok Leyland witnessed significant jumps in dispatches – Tata improved 160% at 1553 units while Ashok Leyland was up 83% at 639 units.

HCVs - Trailers record another positive month from a low base

HCVs – Trailers record another positive month from a low base

However, MCVs are still declining and July 2014 numbers were down nearly 25% from July 2013, at 5307 units. Tata led the fall with a 27.3% drop in orders while VECV followed with a 15.8% drop in dispatches at 1366 units. However, Ashok Leyland had a good month and registered a 11.26% improvement in orders at 1126 units.

MCVs are still out of favour and the segment continues to bleed heavily

MCVs are still out of favour and the segment continues to bleed heavily

The Buses segment was a mixed bag as both Tata and Ashok Leyland saw big declines in volumes, while VECV could improve its volumes significantly albeit from a small base. Tata’s Bus deliveries were 1148 units, down 16% from previous year while Ashok Leyland delivered 1009 buses, down 48.2% year-on-year. However, VECV delivered 384 buses, a 40% jump from July 2013.

Buses rely somewhat on government dole and the segment is still down

Buses rely somewhat on government dole and the segment is still down

Overall, 2950 buses were delivered in July 2014, a 27% decline from July 2013 dispatches and the worst numbers since July 2009.

Light Commercial Vehicles – Still Navigating the Wild

A total of 6433 LCVs (not counting Small Commercial Vehicles like the Tata Ace) were delivered in July 2014. This was a decline of 2.7% from July 2013 deliveries and the worst performance since July 2009.

Tata leads the decline in the LCV segment

Tata leads the decline in the LCV segment

However, within the segment, various OEMs exhibit contrasting behavior. Tata dispatches were down 20% to 2816 units while Mahindra dispatches declined 18.7% to 364 units. Meanwhile. VECV delivered 914 units, a 15.6% improvement year-on-year while SML Isuzu dispatches in the LCV segment were up 33.3% to 456 units.

Small Commercial Vehicles – Mahindra beats Tata

The SCV segment (GVW 0-3.5T) has crashed badly in the last two quarters and dispatches in July 2014 continued with the decline theme. Overall segment volumes were down 22% at 23533 units, the worst since July 2011. Tata’s dispatches in the segment were 10562 units, a drop of 33.3% from previous year.

Tata leads the decline in the SCVs segment

Tata leads the decline in the SCVs segment

Mahindra’s overall numbers were better as the company dispatched 10611 units, a 4% drop from July 2013. Ashok Leyland Dost dispatches also declined 41.8% at 1831 units. Piaggio and Force also registered sharp declines in the segment even though their respective bases were small.

Two Wheelers – Scooters Rejoice, Motorcycles Steady and Mopeds Surprise    

It’s worrying when in a category growing 37% overall last month, you stand out with a 7% decline in dispatches. Hero faces the situation as it dispatched only 52792 scooters in July 2014.

Hero the only failure in the Scooters segment as others grow at a fast pace

Hero the only failure in the Scooters segment as others grow at a fast pace

Meanwhile, segment leader Honda sold 215965 scooters, a 59% jump from previous year. TVS also managed a 64% improvement in scooter dispatches at 57412 units while Suzuki dispatched 41995 scooters, a whopping 184% jump.

On the commuter motorcycle (90cc – 125cc) front, Honda managed to pip Hero again on the growth rate front even though Hero has a huge volume advantage. At 446567 units, Hero dispatches were up 9.17% year-on-year. On the other hand, HMSI dispatches at 126502 units were a 9.7% improvement over previous year. TVS also dispatched more commuter motorcycles – at 34916 units, dispatches were up 15% over July 2013.

Bajaj unable to Discover its strength in the commuter motorcycles segment

Bajaj unable to Discover its strength in the commuter motorcycles segment

Bajaj Auto has been faring badly in the commuter segment and the misery continued in July 2014 as dispatches were down 29% over previous year. At 66868 units, dispatches were less than half of that in July 2012 and July 2011.

Also in trouble is Suzuki, which shifted only 1414 commuter bikes in July 2014, a fall of 70% from July 2013. Dispatches for Yamaha also declined by 5.3% from previous year while Mahindra commuter segment dispatches were up by only 3.2% over previous July.

Yamaha and Hero grow while Honda declines in the 125c - 250cc segment

Yamaha and Hero grow while Honda declines in the 125c – 250cc segment

Yamaha delivered the strongest growth in the 125cc – 250cc segment with 27626 units shifted to dealers, a growth of 36.9% increase. Hero did surprisingly well too. At 17302 units, its dispatches were up by 52.7%. Another strong performer was TVS, which managed a 63.4% improvement in dispatches at 16207 units. Bajaj Auto stays the market leader in the segment, though the company saw a 2.5% decline in dispatches at 57745 units.

Big Bikes – A Different Market Altogether

Big Bikes (>250cc) have a life of their own and maintained their abnormal growth pattern in July 2013. The segment grew by 83%, dispatching 28007 units in July 2014.

Market leader by far – Royal Enfield (REML) – improved its numbers by 80.4% at 26796 units, riding mostly on Classic 350 numbers. However, the off-take of the Continental GT, REML’s flagship model, is slow. In July 2014, REML shifted only 284 Continental GTs, a disappointing number when compared to Harley-Davidson’s 458 units of Street 750.

The Street is priced at twice the Continental GT.

REML defines the segment but grows the slowest in the Big Bikes segment

REML defines the segment but grows the slowest in the Big Bikes segment

Apart from REML, everyone else grew at a much more blistering pace, but from a very small base. Bajaj-KTM dispatches were up 439% at 334 units; Harley-Davidson dispatches improved 161% at 524 units; and Triumph added 109 units to the segment.

It was another good outing for mopeds as the segment volumes improved by 9.36% year-on-year. However, at 56036 units, volumes were lower than July 2012, July 2011, and July 2010 volumes.

 

 

 

 

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