September 2014 had plenty of shades of grey as compared to the last three months. While Passenger Vehicle Sales did manage to end in green, it was not a convincing performance by any measure.
EMMAAA’s analysts stay worried about the market because of the narrow breadth of the recovery and September dispatches again highlighted major problems at GM India, Renault-Nissan-Datsun, Tata, Ford, Mahindra, and Volkswagen-Skoda.
In other words, the entire industry but for Maruti-Suzuki, Hyundai and Honda.
We start September sales analysis with a look at the Passenger Vehicle segments.
The Passenger Vehicle market has realised newfound buoyancy in the last four months. September 2014 wasn’t bad, it wasn’t good either. While the overall sales numbers stay in the green, there is plenty of bloodshed all around.
Within the overall Passenger Vehicle market, the three vehicle segments – Passenger cars, Utility Vehicles, and Vans – exhibit contrasting behaviours. Passenger Car dispatches dipped in September – at 154,882 units, dispatches were down 1% from last September. This volume was the lowest for the segment since 2010.
The Utility Vehicle segment, saw a 24.9% jump in dispatches, and this recovered volumes for the overall market. Honda Mobilio has added volumes to the segment even as the Renault Duster, Nissan Terrano, Maruti-Suzuki Ertiga and Ford EcoSport continue to go strong.
The Van segment continues to stay depressed as the Soft-Top Vans market is facing pressure due to the slow growth in rural economy. Dispatches were down 10.74%, making September 2014 the worst for the Vans segment since 2010.
Overall, Passenger Vehicle dispatches were up 3.26% year-on-year. However. the volume was still lower than 2012 dispatches.
Micro-, Min- & Compact Segments
Hyundai’s September dispatches in the Small Car segments of the Indian market were helped by the newly launched i20 Elite. Further, the Xcent compact sedan and the Grand i10 are still growing strong, helping the carmaker score a 23.5% improvement in dispatches. Incidentally, this was Hyundai’s best September ever in the Small Car segments.
Market leader Maruti’s dispatches in the segment were comparatively subdued and improved by only 1.43% year-on-year. The high base of September 2013 took the sheen off MSIL’s small car dispatch figures this month. This was also the best September ever for MSIL in the Small Car segment.
On the face of it, Tata’s Zest should have improved the company’s dispatches significantly in September. However, real data suggests that the impact has been minimal with dispatches up by only 1.43% year-on-year and a total of 136 units in real numbers.
With a new senior leadership in place at Tata Motors, we would be keenly watching the dispatch numbers over the next few quarters.
Tata’s dispatches of 9656 units were still significantly lower as compared to September volumes of 2012, 2011, 2010 and 2009.
Dispatch numbers also improved marginally for Toyota, which dispatched 127 units more of the Etios hatchback. Compared to September 2013, the company’s Small Car dispatches improved by 5.5%.
Also up were Nissan-Datsun dispatches. Between the two brands, dispatches of Small Cars improved by 20.58% over previous years. However, at 1922 units overall, Nissan-Datsun dispatches indicate that the ambitious Go hatchback has had a cold start. Reviving sale sat this stage would need considerable effort.
Also up were Fiat’s dispatches of the Grande Punto. Again, at 791 units, the 7.33% improvement in dispatches is almost meaningless.
The positive zone of the Small Car market ended with these brands and everyone else had a dismal last month.
The surprising entry on to the negative zone was Honda which would dispatch only 5000 units of the Brio + Amaze models. This is 38.5% down from previous year and may indicate the build up of some excess inventory at Honda dealers.
Also crashing vertically have been the dispatches of Ford’s Figo hatchback. The brand could only shift 1663 units of the Figo this month, a 52.7% decline from previous year.
Similar was the train-wreck of sales figures for GM India. The Chevrolet brand could only dispatch 1734 units of its Small Cars in September 2014, a 53.5% fall year-on-year.
Volkswagen dispatches of the Polo were again in the negative zone after a brief improvement last month. Dispatches were down 16.8% from previous year. This was the worst September show in the Small Car segment by Volkswagen over the last six years.
Also down were Mahindra dispatches of the Vibe hatchback. At 142 units in September 2014, dispatches were down 68% from previous year and it would be a difficult ask for Mahindra to make the Vibe tick again.
But Mahindra can take comfort from Renault, which could only dispatch 54 units of the Pulse hatchback. The last many months have been extremely disappointing for the Pulse and Renault would need to take drastic steps soon to make the Pulse relevant again. Such a low off-take is often an indicator that customers are not even considering the model / brand while making buying decisions and that is never a good indicator for the brand’s survival in the market.
Super-Compact and Mid-Size Segment
The Super Compact and Mid-Size segments have lost significant volume and relevance as all the small sedans – Honda Amaze, Maruti-Suzuki DZire and Hyundai Xcent – are now being compiled under the Compact segment.
The Honda City is currently the market leader in these two segments and the company managed a 125% jump in dispatches last month. The City is at an early stage in its lifecycle and sales volumes are benefitting from the same. Honda’s volumes may have turned out higher in the segment but for the company shifting production of the City to its second plant At Tapukara, Rajasthan. The shift happened only at the start of September and it is likely that there would have been minor disruptions in production in the first half of the month.
Unlike the City, the Hyundai Verna is in the middle of its lifecycle and the excitement in the market is waning somewhat. As a result, dispatches were down 42% in the month, making September 2014 the worst in the last six years for Hyundai in the Mid-Size segment.
Maruti-Suzuki DZire Tour, essentially the last generation DZire is picking up momentum, slowly and steadily. Volumes are improving every month and it is likely that the Tour s finding acceptance in the taxi segment, which has traditionally been buying Tata Indigo eCS / XL, Toyota Etios and Mahindra Verito cars. The DZire Tour does provide a good alternative and comes with MSIL’s unbeatable service and network. Dispatches in September were 2596 units, a 120% improvement from prior year.
Meanwhile the Tata Manza, the company’s mid-size sedan targeted at individual buyers is gasping for breath. Dispatches were 109 units, down 56% from previous year. These dispatch volumes were the lowest for Tata Motors in the last six years.
Ford’s Fiesta and Classic continue to struggle in the market. The Figo sedan would eventually replace the Classic when it makes an appearance sometime in 2015. With the Fiesta, Ford would eventually have to wait for a new generation to set things right. Ford’s dispatches in the segment were all of 586 units, down 32% from last September.
GM India had a dismal outing in the Super Compact / Mid-Size segments with dispatches of the Sail sedan falling 46%. The company shifted only 690 units to dealers, not a good sign especially when the Sail is still in the first half of its lifecycle.
Also down severely was the Toyota Etios – dispatches were down 48.6% at 1638 units. September 2014 was also the worst September for Toyota in the last four years, since the launch of the Etios.
Nissan Sunny dispatches at 428 units were down 38% from previous year even as the badge-sister Renault Scala ended September with dispatches of only 72 units. Both had their worst September ever. What is happening Renault? We hope someone, somewhere, is taking note.
Volkswagen Vento dispatches were down 8.5% from previous year. At 1450 units, the Vento still has considerable volumes, unlike Renault-Nissan. Vento’s badge-sister Skoda Rapid had a good outing last month as dispatches improved by 33.3% over previous year. At 1357 units, the Rapid seems to have benefitted from lower priced variants and an aggressive advertising campaign.
Mahindra seems to have taken its foot off the accelerator in its passenger car segment. The Verito small sedan managed dispatches of only 104 units, down 77% from previous year.
It as good news on the M&HCV front mostly because September 2013 had been a very low base month. The market had already plummeted to levels beyond which it was difficult to fall and the newfound confidence in the political system is aiding the growth in the M&HCV segment.
The Medium Commercial Vehicles (MCV) segment has been lagging behind the Heavy Commercial Vehicles (HCV) segment till last month. The trend stayed the same in September 2014 even though one could detect growth in MCVs as well. Sales dispatches were up for most manufacturers, barring Tata Motors, which still saw a dip in dispatches.
In September 2014, Tata’s MCV dispatches were down 3.2% year-on-year, making it the worst September for Tata Motors MCV sales in the last six years. However, the overall market benefitted thanks to strong numbers from Ashok Leyland and Volvo-Eicher (VECV). Ashok Leyland reported a 9.7% improvement in MCV dispatches while VECV dispatches were up nearly 20% from previous year. Strong growth was also reported by SML Isuzu, but off a very low base.
In the Heavy Commercial vehicles – Rigid Axles segment; Tata and Ashok Leyland lead from the front.
Tata’s dispatches were up 28.9% while Ashok Leyland dispatches were up 54.9% from previous year. A growth in volumes was also reported by Mahindra but off a very low base.
Even though VECV (-13.4%) and AMW (-29.4%) reported a drop in dispatch volumes in the segment, it was not enough to upset the overall volume growth.
The Heavy Commercial Vehicles with Articulated Rear Axles (Tractor-Trailers) segment was the first one to recover in the entire M&HCV market.
The segment continues to drive strong growth and every manufacturer had good growth numbers to report. Tata’s dispatches were up 92% in September while Ashok Leyland saw a near 250% growth in dispatches.
The Buses segment in the B&M&HCV market is the most detached from actual market conditions as it is heavily dependent on government schemes. Dispatches in September 2014 were down for Tata Motors and VECV even though Ashok Leyland managed to hold on to its volumes. Tata saw a 15% dip in volumes while VECV volumes were down 11.2%.
LCVs / SCVs
The LCV segment has been bleeding heavily and September dispatches were a mixed bag. While Tata’s volumes dipped 11.3%, Mahindra managed to improve its dispatch volumes by 16.2%. Overall, the segment reported a 2.8% improvement in dispatch volumes.
The story was almost similar in the Small Commercial Vehicles (SCVs) segment with Tata reporting a 11% decline in dispatches while Mahindra managed a 17.6% improvement in volumes. Overall, the segment improved dispatches by 1%.
If the four-wheeled part of the Indian market is all about grey areas and uncertainties, the two-wheeled segments are all a race of who has better growth numbers to report.
Scooter dispatches across the industry were up by 38% with Honda leading the way with a near 50% growth in dispatches. In comparison, Hero fared poorly with only a 14% growth in dispatches. TVS had a good month as well with a 65% growth in dispatches. So did Yamaha, which saw a 37.5% growth in dispatches from its small base.
In contrast, Suzuki just about managed to hold on to its sales numbers in September while both Piaggio and Mahindra saw a drop in dispatches. Both would be hoping that new model introductions would help improve momentum.
In the Motorcycles below 125cc segment, market leader Hero MotoCorp had a strong month with dispatches of 32%. This helped widen the gap with Honda in the segment as the Japanese manufacturer reported a 22% growth in dispatches. TVS also had good growth numbers to report with dispatches improving 14.6% over previous year.
Bajaj had another pretty bad outing in the commuter bike segment with dispatches down 25% over September 2013. Also in the negative zone were Mahindra (down 11.6%), Yamaha (down 21.1%) and Suzuki (down 42.6%).
The situation was reverse in the higher capacity engine segments (125c-250cc) where Bajaj is the leader. The company managed a 38.9% growth in dispatches in September 2014 as its premium commuter bike dispatches crossed 100,000 units in September.
Yamaha also had near 30% growth numbers to report in the segments. TVS Motor dispatched 18221 units in September in the 125cc-250cc segments, a jump of 38.1% over previous year.
Honda managed to stay upright with a near 5% growth in the premium commuter segments. However, Hero’s dispatches declined nearly 38%.
Things stay heady in the Big Bike segment. All manufacturers continue to report good growth numbers as forecasted by EMMAAA in its Big Bike forecast. Royal Enfield reported a 66.5% increase (27540 units) in dispatches over prior year while Harley-Davidson managed to shift 427 units to its dealers, a 242% growth in numbers. The Street 750 contributed 347 units in that, again outselling the RE Continental 535 (327 units).
Triumph also had a good outing, shifting 148 units in September 2014. However, Bajaj-KTM had a relatively sedate month with dispatches improving by 29% only.