Slowdown Slows Down – Feb 2014 Sales Dispatch Analysis

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As we were wondering when we published our Early Sales Reckoner last week, February 2014 did turn out to be a much better month for passenger vehicle dispatches. True, dispatches were still down 3.86% over Feb 2013, but there was plenty to cheer about.

We were also optimistic with Feb 2014 dispatches as the recent reduction in excise duty and the corresponding reduction in prices of vehicles was expected to galvanize the market.

In fact, looked at it in isolation, Passenger Car dispatches actually ended 1.4% up over Feb 2013 sales. It is still the Vans and Utility Vehicles segment that is pulling things down.

Until you decide to scratch the surface…

But first the big numbers.  

Passenger car dispatches in February 2014 were 160718 units, an increase of 1.4% over Feb 2013 dispatches of 158512 units. However, Feb 2014 was still very low as compared to Feb 2012 and Feb 2011 numbers. Dispatch numbers in Feb 2014 were down 24.67% over those in Feb 2012 and 14.97% down over Feb 2011 numbers.

Major Segment Sales Feb 2014Utility Vehicle dispatches were 43507 units, down 8.57% from Feb 2013 numbers. However, Feb 2014 UV dispatches were significantly higher than Feb 2012 and Feb 2011 numbers.

Manufacturers dispatched only 13524 vans in Feb 2014. This is a 32.76% drop from Feb 2013 dispatches of 20112 units. Moreover, dispatches were 41.07%, 26.13% and 12.68% lower than Feb 2012, Feb 2011 and Feb 2010 levels, respectively.

Overall, Total Passenger Vehicle dispatches were 217749 units, a fall of 3.86% from Feb 2013 dispatches of 226483 units. Dispatches were also 19.88% below Feb 2012 levels of 271801 units and Feb 2011 levels of 235521 units.

So apart from the Passenger cars segment, everything else seems to be in deep red still. Does this mean that Passenger Cars are turning the corner?

Significant Models

A look at OEM level delivery data in the micros-segments in Passenger Cars segment shows that a significant increase in dispatches has happened only with Honda in the Compact segment (mostly due to Amaze dispatches), Maruti in the Compact segment (Celerio inventory creation at the dealer level), Hyundai in the Compact segment (Grand i10 gaining momentum) and Honda in the Mid-Size segment (City inventory creation at dealers).

Apart from these, everything else is still slowing down. Take the newly launched Celerio and City away from the picture and the overall Passenger Cars sales picture is still quite bleak.

Dispatches also improved for the Nano by 65.84% over Feb 2013. This is yet another month where the Nano dispatches have shown a marked improvement. The surge in dispatches Is mostly due to the Nano Twist variant. We will wait a few more months before we can say if it is a genuine surge in demand for the Nano twist or just temporary inventory creation.

However, Nano dispatches in Feb 2014 were still 72.9% lower than Feb 2012 dispatches (9217 units) and 69.78% lower than Feb 2011 (8262 units) dispatches.

Honda dispatched 7213 units of the new City to dealers in Feb 2014. This is a 120.5% growth over Feb 2013 dispatches and the best February ever for the Honda City.

Significant Segments

The Mini segment in the Passenger Car market accounted for 48791 units in Feb 2014. This is a 10.27% decline from Feb 2013 dispatches in the same segment. Hyundai dispatched 11314 units, fall of 9.76% over Feb 2013 numbers of 12538 units.

Maruti faced pressure in the segment due to the general market climate as well as the discontinuing of the M800 and the A-Star models. Sales were down 9.6% to 37342 units, from 41311 units in Feb 2013.

In the Compact segment, Honda was the brightest shining star with 7265 units of the Brio and Amaze models getting dispatched. This represents a 134.28% increase in volumes over Feb 2013. This also makes it the best Feb ever for Honda in the Compact segment.

Maruti dispatches in the Compact segment in Feb 2014 jumped nearly 20% from Feb 2013 numbers. Thanks to the Celerio, Maruti dispatched 28672 units as compared to 24021 units. Overall, Maruti dispatched 65332 units in the Mini + Compact segment, only slightly short from the 66014 units the company dispatched in Feb 2013. This is also 14.2% down from the 77003 units Maruti dispatched in Feb 2012 and 11.7% down from the 74802 units it dispatched in Feb 2011.

Hyundai also had a decent Feb 2014, dispatching 18909 units, a 19.77% jump over Feb 2013 dispatches of 15787 units. It was also better than the 15168 units Hyundai dispatched in Feb 2012. However, as compared to Feb 2011 and Feb 2010 dispatches of 30009 and 28198 units respectively, volumes were significantly down.

GM saw a dip in dispatches in both the Mini and Compact segments. Overall, GM sent 2903 units to dealers in the Mini + Compact segments, 14.16% down from 3382 units in Feb 2013. Compared to Feb 2012 dispatches of 6009 units and Feb 2011 volumes of 6299 units, dispatches in Feb 2014 have more than halved.

The same is the situation with Ford, which shipped 3099 units of the Figo last month. This was 18.53% down from Feb 2013 dispatches but less than half from Feb 2012 and Feb 2011 volumes of 6546 units and 7883 units.

Mini+compact-Feb 2014Fiat Punto dispatches jumped 451% over last year mostly because it is difficult to fall below the 160 units Fiat dispatched in Feb 2013. However, volumes last month were still lower than Feb 2012 and Feb 2011 numbers.

Tata Motors managed to maintain its dispatches from last year. However, its volumes of 6254 units in Feb 2014 were nearly one-third from Feb 2012 units and significantly lower than Feb 2011 and Feb 2010 volumes.

Toyota moved 1227 Livas to dealers in Feb 2014, a 27.73% fall in numbers from Feb 2013. Sales have crashed significantly since from the 3437 Livas that Toyota shipped in Feb 2012.

In the Super Compact segment, Maruti-Suzuki managed to maintain the dispatch volume of the D’Zire. In Feb 2014, the company managed to dispatch 18353 cars in the Super Compact segment, 37 units more than Feb 2013.

However, apart from the D’Zire, every other model in the Super Compact segment witnessed a fall in sales.

The Mid-Size segment saw overall dispatches of 14570 units in Feb 2014 with nearly half of that coming from the Honda City. Honda shifted 7213 Citys to its dealers, a jump of 120.5% over Feb 2013 dispatches of 3271 units.

However, everything else in the segment fell sharply. Ford, GM, Nissan and Renault saw dispatches falling by more than 50% over Feb 2013.

Beyond the Mid-Size segment, the Executive, Premium and Luxury segments accounted for 1422 units between them. That it took 22 models combined to do so is a good enough indicator of the market.

Oh, and it’s annual bonus season as well at most corporates.

Special Issue: Renault-Nissan sales

At first look, Renault-Nissan isn’t doing that badly. The two brands combined dispatched 6107 units in Feb 2014. This represents a 29.57% fall in numbers over Feb 2013 dispatches of 8671 units. However, like everything else, worrying things emerge when you scratch the surface.

For instance, the 6107 units include 1405 units of the Terrano (plus Evalia). Last Feb the Terrano did not exist and Nissan had managed to shift only 147 units of the Evalia.

Scratch further and we can see that nearly 54% of the sales come from the Duster. This indicates a huge reliance on a single model – nothing wrong with that really except it makes us a bit queasy.

Renault-Nissan Feb 2014 vs Feb 2013What is actually worrying is that Renault and Nissan are both washouts in the volume segments. Between the Micra, Pulse, Sunny and Scala, Renault and Nissan shifted only 1383 units to the dealers in Feb 2014. This is a 51% fall from Feb 2013 dispatches of 2839 units.

The Sunny, once well received in the market and maintaining dispatch volumes of about 3000 units accounted for only 246 units in Feb 2014. Cousin Scala had only 213 units to show.

And then there is the stillborn Evalia. Sales haven’t quite managed to cross the imaginary hurdle of 150 units a month.

For two brands to ship 6107 units while being present across seven segments is disturbing and puts a huge question mark on the viability of launching another brand in Datsun. However, the Go’s pricing may actually ignite sales for the group.

Guidance

Surprisingly March 2014 may see the momentum build further. We are relatively optimistic for this month as it is Election season and that generally improves the liquidity in the system. What should also help is the recent reduction in excise duty that has lowered the price of nearly every model in the market.

And then there are minor things like Hyundai doing the commercial launch of the Xcent small sedan. This will give the company a volume model in the Super Compact segment. With inventory building at the dealer end, we should see a boost to Hyundai numbers in March 2014.

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