Patchy November

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Passenger vehicles performed well; Heavy Trucks even better in November. However, SCVs continue to remain subdued, giving us worry. On the Two-Wheeler side, Motorcycles are struggling but Scooters continue flying in a different orbit altogether. This in short was the story of November 2014.

November is an interesting month. It is the end of the Hindu festival season and most dealers are exiting the festive season with depleted inventories (in a good year) or a fat stockpile (in a bad year). The performance in the festive season decides the uptake from dealers in November and the last month was no different.

Passenger Vehicles Manage an Uptick

On the face of it, Passenger Vehicle dispatches were up 5.42%. However, dig deeper into the data and we observe that there were a number of one-off occurrences that supported dispatches in November. We will talk about them later in this analysis.

Total Passenger Vehicle dispatches were above 212,000 units. At this volume, deliveries to dealers were still lower than those in November 2012 (the best Nov till date), and even the deliveries of Nov 2011.

Nov 2014 - Passenger Vehicle Sales

Breaking down Passenger Vehicle dispatches into broad segments and Passenger Cars came out on top this month. Dispatches were up 9.52% over previous year. At above 156,000 units, Passenger Car dispatches were still lower than dispatches in Nov 2012, Nov 2011 and even Nov 2010. The year 2011 had seen the best dispatch volumes for a November till date.

In comparison, Vans were up 2.41% only, solely driven by Maruti-Suzuki Omni and Eeco dispatches. At slightly less than 15,000 units, Van dispatches were much lower than the volume in Nov 2012 and even lower than the dispatch volumes of Nov 2011 and Nov 2010.

In contrast, Utility Vehicles were down 6.84% from previous year, mostly due to a decline in Mahindra’s dispatches. At above 41000 units, Utility Vehicles dispatches were lower than the Nov 2012 volumes. This was the lowest Nov dispatch since the advent of the seven-seater compact MPVs and small-SUVs in the market.

Mini, Micro and Compact Segment

In the biggest segments of the market, Maruti, Hyundai, Toyota, Tata and Volkswagen shored up the numbers while every other manufacturer saw a decline in dispatches.

Maruti-Suzuki dispatches in the segment were 6% up as the company made up for the Oct shortfall with November deliveries to dealers. Last month, MSIL had dispatched a significantly lower volume because of lower number of working days (19 as compared to the normal 25).

Nov 2014 - Mini, Micro and Compact Segments

Hyundai dispatches in the Mini, Micro and Compact Segment were above 31600 units, a 12.43% increase over last November. The company is benefitting from a fresh product portfolio of the Xcent and i20 Elite, and the continuing strong demand for the i10 Grand. This was the best November ever for the company.

Volkswagen managed a 16% uptick in dispatches in November at 2843 units for the Polo. Volumes were still lower than those in Nov 2012 and Nov 2011. However, we feel that the Polo has been showing some resilience in the last few months and should sustain volumes around 3000 units per month for some time.

Toyota’s volumes also improved by about 400 units – at 2843 units, dispatches were up 16% from Nov 2013. The Liva hatchback is stabilizing at around 2500 units per month as demand from the taxi-segment is adding to the volumes. This was the best November for the Liva in the last three years even though volumes were still down 34% from Nov 2011.

The surprising winner in the volume segments in November 2014 was Tata Motors. At above 10100 units, Tata volumes were 32.5% up from Nov 2013 dispatches. It seems that the Zest is picking up some momentum and we would be keeping a close watch on the numbers in the coming months. Even the Nano did slightly better and at 1900 units, dispatches of the small hatchback were 82% up from Nov 2013 dispatches of 1045 units. Overall, Tata Motors volumes in the Mini, Micro and Compact segments were still much lower than their volumes in Nov 2012. In fact, Nov 2014 dispatch volumes were less than half of the dispatches in Nov 2011.

Also up, statistically were Nissan + Datsun volumes. At 901 units, volumes were nearly 20% up from Nov 2013 dispatches. However, between last year and this year, Nissan has added Datsun and the Go hatchback to its portfolio. Splitting 901 units between the Micra and Go would not put a smile on the face of anyone in Nissan.

Also up – more like a consolation prize in a children’s fest – were Renault Pulse volumes. At 432 units, dispatch volumes were up 160% from Nov 2013 even though they were still a few units short of Nov 2012 volumes. Also at 432 units, the Pulse is still not going anywhere and Renault has some deep introspection to do.

Apart from the above manufacturers, everyone else was in deep red. GM India had a horrible month once again with Spark + Beat + Sail hatchback combined volumes falling 40.6% over previous year. This made Nov 2014 the worst Nov in the last six years for GM India in the volume segments.

Surprisingly down were Honda dispatches of the Brio + Amaze. At 4360 units, volumes were down 53% over previous year. In recent months, we have seen Amaze dispatches fluctuating quite a bit and we would be keeping a close eye on Honda’s dispatches in the volume segments in the coming months.

Ford had yet another dismal month for the Figo. At 1363 units, Figo dispatches were half of Nov 2013 volumes and the worst in the last five years. Since Nov 2011, Figo has been on a continuous decline and Ford is yet to arrest the same.

After many months of putting up a fight, Fiat has again dropped the ball. At 250 units, Grande Punto dispatches were disappointing and nearly 65% down from Nov 2013 volumes.

Another company throwing in the towel is Mahindra as the Vibe volumes were all of 83 units. This was 66% down from Nov 2013 dispatches of 244 units.

Super-Compact and Mid-Size segments

The Super-Compact segment is appearing quite thin with the Honda Amaze, Maruti-Suzuki D’Zire and Hyundai Xcent having moved to the Compact segment. Participation is rather thin with only the Toyota Etios, Mahindra Verito and Maruti-Suzuki DZire Tour (previous generation DZire) participating in the segment.

However, the Mid-size segment is a keenly fought battle. With the introduction of the Maruti-Suzuki Ciaz, it has become a three-sided battle between the Ciaz, Hyundai Verna and Honda City. Apart from these three, there are another seven models fighting n this segment.

The Ciaz is in the data honeymoon period and is helping Maruti-Suzuki notch up some healthy growth numbers. Dispatch volumes in Nov 2014 were 7221 units.

Nov 2014 - Super Compact & Midsize Segments

Also enjoying the benefits of statistics was the Honda City. In November last year, Honda did not shift any Citys and so we have nothing to compare Nov 2014 numbers with. However, even taken alone, City’s dispatch volumes of 7252 units were still impressive.

Apart from Maruti-Suzuki and Honda, both of whom enjoyed Data Honeymoon for the Ciaz and City respectively, every other player in the segment saw a sharp decline in dispatches.

Hyundai witnessed a 51% decline in Verna dispatches to 1588 units, making this the worst Nov since 2011. A heavy facelift for the Verna is badly needed.

Toyota also saw a decline in Etios sedan dispatches. However, at 2128 units, Etios sedan volumes were only 6% down from Nov 2013. It appears that Toyota is fighting hard to preserve volumes and the Etios may not decline below 2000 units for some time. At only 6% down, the Etios performance also compares favorably against other carmakers who have seen far more severe declines in the Super Compact / Mid-Size segments. The Etios is also being helped by the newfound interest with the taxi segment.

GM had another dismal month with the Sail as the Mid-Size sedan fails to maintain any momentum. It seems that sales are now coming only from the taxi segment. November 2014 dispatches were 604 units, down 14.6% from previous year.

For both Renault and Nissan, November 2014 was equally difficult. While the French brand saw dispatches decline by 71% from previous year, the Japanese brand’s dispatches were down 21% from previous year. However, while Nissan managed to shift 411 Sunny’s to the showrooms, Renault Scala dispatches were all of 86 units.

Tata’s Manza continues to struggle and Nov 2014 dispatches were all of 138 units, down 45% from previous year. It would be difficult for Tata to revive the Manza as the carmaker’s energies are focused on the Zest.

Ford’s Classic and Fiesta models continue to struggle and we don’t expect any miracles happening there. In Nov 2014, Ford could convince its dealers to take deliveries of 412 Mid-Size cars only, down 27% from previous year.

The story also repeats for Volkswagen. Even though the Polo has been showing some resilience, the Vento has been in a free fall in recent months. Nov 2014 dispatches were down 45% from previous year. At 894 units, this was the worst November in four years for the Vento.

Cousin sister Skoda Rapid held up better as the brand shifted 958 units to the showrooms in November 2014, a 3.33% decline from last year.

Mahindra Verito’s volumes are now firmly in the double digit zone and a revival from here would be tough. In November 2014, the company moved only 69 Veritos to its showrooms, a 75% decline from previous year.

Commercial vehicles – HCVs Rule, MCVs & LCVs follow; SCVs Stabilise; Buses Crash

In the Commercial vehicles space, Heavy Commercial vehicles continued with their strong recovery. In the Heavy Trucks with rigid rear axles segment, dispatches were up by 71% overall. At 7127 units, the volume was still significantly lower than the Nov 2011 highs of 11100 units.

Nov 2014 - Heavy Commercial Vehicles - RIGID AXLES

Ashok Leyland led the charge in the Heavy Trucks with Rigid Axles segment with a 165% improvement in volumes. The company’s Captain range appears to have received a good response and the company managed nearly 1700 units in dispatches in November.

Both Tata Motors and Volvo-Eicher (VECV) too managed to nearly double their volumes from last year.

Nov 2014 - Heavy Commercial Vehicles - TRACTOR TRAILERS

Recovery was even stronger in the Heavy Trucks with articulated rear axles (Artics / Tractor-Trailers) segment. Dispatch volumes were up by 223% at 1906 units.

Again, the recovery was led by Ashok Leyland, which witnessed a 339% increase in dispatches at 628 units. Tata also had strong volumes and witnessed a 205% jump in volumes.

The recovery in the HCV segment is an early indicator that the economy has started to recover. While the MCV segment has been lagging behind in the recovery and has reported negative growth in the last many months, November dispatches were significantly better.

Nov 2014 - Medium Commercial Vehicles

Overall, the industry dispatched 5450 Medium Duty trucks in November 2014, a 11% jump from previous year. In the segment, growth was led by VECV, which reported a 20.4% jump in dispatches at 1364 units.

Tata Motors had a good month too with a 9.6% jump in dispatches at 2850 units. Rival Ashok Leyland reported a 15.5% improvement in dispatches at 1074 units.

In the Light Commercial Vehicles segment, dispatches were up 13.1%, An improvement across the three major commercial vehicle segments is a strong indicator of a recovering economy and of the market starting its journey to recovery.

In the LCV segment, Force was the leader in terms of volume growth with dispatches of 1294 units.

Nov 2014 - Light Commercial Vehicles

Also having a good month was SML Isuzu, which reported a 18% improvement in dispatches, though off a very small base.

In contrast, market leader Tata Motors had a comparatively slow month with dispatches rising by only 10 units from last year. November 2014 volumes for Tata were 2136 units.

Also having a slow month was VECV with dispatches of 497 units, a 2% jump from Nov 2013. Mahindra dispatched 298 units, a 9.6% jump from previous year.

The Small commercial vehicles segment comprises of Goods Carriers below 3.5T GVW. It is essentially made of two types of vehicles – traditional pick-up trucks sold by Mahindra and Tata Motors and Indian market specific micro-trucks like the Tata Ace. The category has witnessed a severe crash over the last many months. Sales had been falling 40%-50% every month on a year-on-year comparison.

Nov 2014 - Small Commercial Vehicles

November 2014 was a slightly better month for SCVs as dispatches were down only 4% at just less than 27000 units. The stabilization was on account of Mahindra managing a 6.9% growth in its pick-up and small truck dispatches. At 12040 units, Mahindra also beat Tata Motors in November.

In comparison, Tata Motors dispatched 12006 units of its small trucks and pick-ups. This was a near 11.8% decline from previous year.

Also having a bad month was Ashok Leyland, which dispatched 2272 units, a decline of 9.8% from previous year.

Nov 2014 - Buses

The Buses segment continued to stay depressed with deliveries falling 9% from previous year. Leading the fall was market leader Tata Motors with a 23.4% decline in deliveries at 737 units.

Arch-rival Ashok Leyland was a story in contrast as it saw a 34.4% jump in deliveries at 657 units.

The third prominent player, Eicher Motors, also saw a decline in dispatches at 134 units, a fall of 18.3% from previous November.

Two Wheelers – Motorcycles Falter; Scooters Zip

The two-wheelers story was a mixed lot as motorcycles stumbled yet again. However, sanity was maintained by Scooters, which continued to soar as if in a different market altogether.

The Commuter Motorcycles (<125cc) segment declined by 6.3% over Nov 2013. At 692000 units in dispatches, this was the worst November in the last four years for the segment.

The fall was led by Bajaj Auto which saw volumes almost halving in the segment. In November 2014, the company dispatched 59838 units, a 47.8% fall from Nov 2013 volumes of 114668 units. This was the worst November in the last six years for Bajaj Auto in the Commuter segment.

Nov 2014 - Motorcycles <125cc

Also down were Yamaha and Mahindra. Yamaha dispatches were down 29.76% at 2925 units, over previous year dispatches of 4164 units. Mahindra dispatched 8911 units, a 55% fall from last year.

Suzuki too witnessed a 52% decline in Commuter segment dispatches as the Sling Shot has failed to get any traction.

All the other OEMs managed to improve their dispatches over previous year. Market leader Hero MotoCorp’s dispatches were 452526 units, up 0.61% over previous year.

Meanwhile, Honda Motorcycles & Scooters India (HMSI) managed to dispatch nearly 127000 units riding on the good response to the newly launched CD 110 Dream commuter bike. HMSI’s dispatches were up 10.5% over previous year.

Nov 2014 - Motorcycles (125cc-250cc)

TVS had a rocking month in the commuter segment with a 22.4% increase in dispatch volumes at 39468 units.

The tables are turned in the 125cc-250cc Super Commuter / Sports Commuter segment as Bajaj is one of the biggest gainers. The manufacturer improved its dispatch volumes to 66919 units, a 42.2% jump from previous year. However, Bajaj dispatches are still way below the company’s volumes in Nov 2012 and Nov 2011.

Also growing strong was TVS, which managed a 51.5% uptick in dispatch volumes. In Nov 2014, TVS dispatched 17018 Apaches, up from 11230 units dispatched in Nov 2013.

Suzuki has managed a good response for the Gixxer even though it’s early to make a comment. In Nov 2014, the company dispatched nearly 6500 units.

Yamaha had a good month too with dispatches up by 29%, at 26163 units, from previous year volumes of 20309 units.

However, Honda and Hero both suffered huge declines. Honda saw volumes declining by nearly 65% to 9845 units while Hero lost 62% volumes to 5955 units.

Overall, the 125cc – 250cc segment reported strong dispatch growth of 8.1% to 132417 units.

The 250cc+ segment has been the flag-bearer of growth in two-wheelers for some time. These machines are aspirational and have seen a high growth in the last three years.

Nov 2014 - Big Bikes (>250cc)

 

The segment is led by Royal Enfield (REML) , which witnessed a 53.5% jump in dispatches in the month. In November 2014, REML dispatched more than 27000 motorcycles, making it the best November yet for the brand.

Harley-Davidson dispatched 384 units, a 105% growth for the brand. This included 243 units of the Street 750. In comparison, REML shipped only 174 units of its flagship Continental GT in November.

Mopeds may be dead for most of us but the segment grew by 11.8% in November 2014. At 61630 units, this was sweet picking for TVS Motors, the only brand active in Mopeds now.

Nov 2014 - Scooters

Scooter dispatches improved by 26.5% over November 2013. Dispatches in November 2014 were just short of 387,000 units. The growth was led by market leader HMSI which reported a 32.5% jump in dispatches at just short of 217,000 units.

Arch-rival Hero MotoCorp reported a 13.6% growth in dispatches at 62520 units.

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7 Responses

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  1. prabhjot
    Dec 10, 2014 - 07:28 PM

    Hi again, thanks.

    I wonder if you could give your opinion on the following thesis: the levels of market concentration/dominance/pricing power/etc is approaching cartel-levels (even though there isn’t one, i hope!) in the B2, C1 and C2 car segments. Maruti, Hyundai and Honda between them completely have a stranglehold over, what?, 70% + of these segments? Maruti has, i gather from the business press, margins touching 12%, which are unheard of in any other big market for any cars other than luxury ones. The feedback loop of: higher sales–>stronger dealers–>better economies of scale in after-sales service and spares–>better word-of-mouth–> better sales–>…. is playing out more strongly than ever, resulting in all the other firms and their dealers getting near-derailed, some of whom it seems would be best advised, at this rate, to not try to compete here at all, if India weren’t a manufacturing base for their exports.

    Reply
    • DR
      Dec 10, 2014 - 11:16 PM

      I agreed with you till “resulting in all the other firms and their dealers getting near-derailed” Now how does someone’s good performance and better understanding of the market derail newcomers? I think the newcomers, who aren’t exactly new now, have lost the plot because they hired the same old guys to run their show. The industry is devoid of new ideas.

      Reply
      • prabhjot
        Dec 14, 2014 - 08:29 PM

        Well, here’s how: the economies of scale in sales and service and resale cause a feedback loop that distorts the information new customers have when deciding which car brand/model to choose, by exagerrating word-of-mouth certification. A pretty standard game-theoretic outcome: it becomes rational even for an autonomous, well-informed, skeptical, value-maximising new customer to pick one of these three dominant brands (one does what other guy does, since that means better resale, service). Plus: the usual ‘herd effects’ and biases, probably greater in the Indian car market than in any other big market (buy what the father/brother/friend recommends or just buy whatever’s selling well, a ‘the herd-knows-best’ decision-rule).

        To be fair to these firms: it is NOT their fault in any way. More the strange behavioural bias-es of most/an increasing number of customers.

        The market structure is very weird: no other big market has anything like this degree of concentration, without a cartel, or state-dispensed favours (barring Maruti somewhat) either!

        Say what?

        Reply
  2. MANJUNATHA D S
    Dec 11, 2014 - 04:23 AM

    71% Growth in HCV segment is a positive sign and a pointer to possible economic growth. However, the absolute numbers are far below the Nov 11 peak. Probably, the Auto Industry may have to wait for a few more months to reach record highs.

    Reply
  3. Schrodinger
    Dec 11, 2014 - 04:53 AM

    No analysis of the UV segment in Nov? It was quite disastrous across board!

    Reply
  4. ganeshKP
    Dec 17, 2014 - 07:40 AM

    good input.

    Reply
  5. yogesh
    Jun 02, 2015 - 07:00 AM

    Dear Indian Auto Report,

    I require consolidated sales volume data based on displacement range for two wheelers for FY 2011-12, 2012-12, 2013-14. I am primarily targeting premium segment bikes for my MBA (Marketing) Course Final Project Report.

    Regards

    Reply

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