The automobile industry in India showed a positive growth trend in February, after about eight months of flat or negative growth. The growth was mainly driven by the stimulus packages announced by the Indian Government and easier auto loans by public sector banks. However, the industry expects flat growth for the next few months on account of the base effect and restrained corporate spending.
In the car segment, Maruti Suzuki reported highest ever sales for February, but Tata Motors' sales dropped, despite being the highest sales in the last four months.
In the two-wheeler category, Hero Honda and TVS Motors registered positive growth in February, while Bajaj Auto's reported lower sales. On the export front, TVS Motors exported more two-wheelers this month.
India's largest bank, State Bank of India, has capped the interest rate on car loans at 10% for the first year. The decision by the state-owned bank will shave at least 150 basis points off current loan rates for automobiles and other banks are also expected to follow suit. This will be good news for the ailing auto industry.
Maruti Suzuki
Maruti Suzuki India Ltd. reported the highest-ever total sales in February 2009, including exports, of 79,190 vehicles, up 24% from 63,822 units last year. The previous highest total sales were 71,779 units registered this January.
In the domestic market, the company reported higher sales for the second consecutive month as it sold 70,675 units, up 19% from 59,030 in the same month last year. The previous highest monthly domestic sales were recorded in January this year, totaling 67,005 units.
Sales of flagship vehicle, the Maruti 800, declined 29% to 4,075 from 5,745 sold in February last year. The company registered the highest ever export sales of 8,565 units, up 90% from the 4,511 units in February 2008. This is higher than the previous highest export sales of 8,282 units recorded in March 2004.
For the first eleven months of fiscal 2009, total sales, including exports, rose 2% to 706,498 vehicles from the 694,546 in the corresponding period last year. Sales of Maruti-800 plummeted 26% to 46,953 vehicles from 63,200 for the same period a year-ago.
R.C. Bhargava, Chairman, said the worst of FY09 seems to be over and that the next fiscal will be positive. He, however, added that 10% to 12% growth might not happen, but he does not expect a contraction. He sees growth to be in low single digits.
Tata Motors
In February, total sales of Tata Motors, including exports, were 43,807 units, the highest in the last 4 months, but 19% lower than 54,180 sold in February last year. Sales for the first eleven months in the current fiscal year were 444,071, 14% lower than the corresponding period in the last fiscal.
Sales of commercial vehicles in the domestic market were 23,454 units, the highest since September 2008, but 25% lower than 31,317 units sold in February last year. Cumulative sales during April-Feb 2009 were 236,006 units, a decline of 15% over 277,367 last year.
Passenger vehicle sales in the domestic market were 19,039, the highest since May 2008, but 2% higher than 18,766 vehicles sold last year. Cumulative sales of passenger vehicles in the domestic market for the eleven-month period were 176,454 units, down 7% from 190,021 units in the same period last year.
Export sales in February 2009 plummeted 68% to 1,314 vehicles from 4,097 vehicles in February 2008. Cumulative sales from exports for April-February 2009 fell 35% to 31,611 units from 48,507 units in the corresponding period last year.
The company said while the financial stimulus announced by the Government, particularly for commercial vehicles, has had a positive impact, the retail market would still take some time to reach the corresponding period levels of the last fiscal.
Tata Motors said it would launch the much-awaited Tata Nano in Mumbai on March 23, 2009. The cars will be on display at Tata Motors dealerships from the first week of April 2009 and the booking will commence from the second week of April 2009.
Bajaj Auto
Bajaj Auto's total two-and three-wheeler sales in February 2009, including exports, declined 16% to 153,782 units from 183,807 units in February 2008.
For February 2009, Bajaj Auto reported total two-wheeler sales of 132,393 units, down 17% from 159,508 units reported last year. Sales of three-wheeler vehicles were down 12% to 21,389 units from 24,601 units a year earlier. Exports during the month also fell 20% to 50,738 units from 63,182 units posted in February 2008.
For the April-February 2009 period, Bajaj Auto's total two- and three-wheeler sales, including exports, were 2,040,015 units, down 10% from 2,275,127 units for the comparable period of the preceding year.
The company said it is planning to launch four product upgrades in April 2009 to further strengthen its leadership in the 125cc+ motorcycle segment.
Bajaj expects to close with exports of around 775,000 units in FY09, representing growth of 25% over the export of 618,341 units in FY08.
Hero Honda
In February, Hero Honda Motors reported a 24% jump in its two-wheeler sales at 329,055 units, compared to 265,431 units in the same month of the preceding year.
For the period Apr-Feb, while overall industry grew by 1.7%, Hero Honda has grown by 10.7%. Now with its robust performance in February, the company's year-to-date growth has gone further up to more than 11%.
Anil Dua, Senior Vice President (Marketing and Sales), said, "Our new launches, including Passion Pro Power Start in particular, have been driving strong volumes across geographies, further consolidating our more than 56% share in the domestic motorcycle market. We have just introduced a Special Edition Hunk to commemorate our 25th year, which is also expected to catch the fancy of our customers."
TVS Motor
Chennai-based TVS Motor's February total two-wheeler sales rose 13% to 107,301 units from 95,235 sold in the corresponding month of 2008, despite the effects of the ongoing economic slowdown, high interest rates and the continued lack of retail credit. Cumulative growth for the first eleven months during this fiscal year was 3%.
During the month, the company's motorcycle sales increased 7% to 49,659 units from 46,565 sold in the same month in the preceding year. Exports during the month were 16,583 units, up 32% from 12,523 units exported in February 2008.
Exports continued its overall growth trend, registering 43% increase in cumulative sales for the period Apr-Feb 2009, when compared to the same period of the previous year.
At BSE Sectoral indices, the auto sector was up 0.01% at 12.24 hrs. on Tuesday.
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