Automakers in India reported strong double-digit sales growth in November 2011, with volumes increasing despite expectations of slowing demand from higher interest rates and prices. Two-wheeler sales grew 28% year-over-year to over 1.3 million units, led by Hero MotoCorp, Bajaj Auto and TVS Motors. Major automakers like Tata Motors, Hero and Ashok Leyland reported better-than-expected numbers. Passenger vehicle sales increased 17% to around 210,000 units, while commercial vehicles grew nearly 22%. Going forward, industry growth is expected to be driven by two-wheelers, though higher costs and interest rates could impact profitability if passed on to customers.

1. Automobile Monthly | 12st Dec’11
Monthly Auto Sales – November’ 2011 Sector Update
Price Performance Automakers maintained their strong volume growth in
Scripts Y-o-Y M-o-M Nov-11 Nov-10 Oct-11 Nov’11, recording double-digit sales growth. Despite
Sensex -15.6% -6.9% 16483.5 19521.3 17705.0
Auto -16.5% -11.0% 8434.2 10099.9 9477.2
expectations of a slowdown in demand due to higher interest
ALL -31.4% -9.6% 24.6 35.9 27.2 rates and product price increases, volume growth remained
BJAL 6.2% -3.5% 1672.9 1575.4 1733.2 optimistic on the back of positive consumer sentiment and
Hero 5.9% -3.9% 2089.9 1973.4 2175.7
Maruti -32.0% -13.9% 968.7 1423.8 1125.7
heavy discounts offered by OEMs and dealers to maintain
M&M -5.5% -16.1% 723.9 766.3 863.2 sales momentum. Among the majors, Tata Motors, Hero
Tata -30.3% -13.1% 172.5 247.4 198.5 MotoCorp and Ashok Leyland reported better-than-expected
TVS -27.7% -13.9% 59.3 82.0 68.8
numbers for the month.
Key Player & Industry Volume growth- Nov’11
November volumes showed a sign of revival from the previous
Industry
27.8% month. The industry clocked more than 1.2 million vehicles across
8.5% category in November’2011. Industry growth is expected to be
28.7%
driven primarily by two-wheelers vehicles. Domestic passenger
Hero car sales zoomed 17% Y-o-Y to ~2.1 lakh units in November, 2011,
4.8%
from 1.8 lakhs units same month last year, while the commercial
53.4% vehicle (CV) segment has witnessed 21.6% Y-o-Y growth (10.5%
ALL
26.0%
M-o-M) basis. While motorcycle sales grew by 28% Y-o-Y during
11.8% Y0Y gr the month to 12 lakhs units.
TVS
-4.5%
25.1% MoM gr
Bajaj Outlook
-5.3%
52.7% The outlook towards volume growth in the sector is commingling,
M&M
-1.9% on an index performance basis; the BSE Auto index
-18.5%
underperformed the Sensex with M-o-M return of -11% as
Maruti
65.1% compared to 11.5% during the month of Oct. On the demand side,
2-wheeler demand remain structured, while some down side
Tata
40.6% movement in LCV and M&HCV can be seen in near term on account
13.0% of economic slowdown amid the challenges. Though it is to be
noted that demand is structural, immediate concerns for the sector
Source: Company, R K Global research
like higher interest rates and inflated commodity price with
Research Analyst depreciating domestic currency could cause serious concerns for
Aditya Vikram Jha
aditya.jha@rkglobal.in the whole industry as profitability and volume growth could see
erosion.
Key Players & company volume growth YTD
SEGMENTS Nov -11 Oct -11 Nov-10 Y-o-Y % M-o-M % YTD FY'12 YTD FY'11 YTD%
Two Wheelers
TVS 172839 180637 153882 12.3% -4.2% 1994253 1881177 6.1%
Hero 536772 512238 417056 28.7% 4.8% 5605796 4901506 14.4%
Bajaj 331967 351083 265036 25.2% -5.4% 3510126 3239027 8.4%
Total 1041568 1043957 835974 24.6% -0.2% 111101175 10021710 10.8%
Three wheelers
TVS 2706 3081 3159 -14.3% -12.2% 41168 31848 29.3%
Bajaj 42510 44191 34195 24.3% -3.8% 457048 420090 8.8%
M&M 5889 6332 4468 31.8% -7.0% 57892 49170 17.7%
Total 51105 53604 41822 22.2% -4.7% 556108 501108 10.9%
Passenger Vehicles
Tata 27737 25124 15340 75.8% 11.7% 267721 284633 -5.9%
M&M 17813 18756 12323 44.5% -5.1% 187173 168815 10.8%
Maruti 73078 41192 87618 -16.6% 77.4% 774672 711928 8.8%
Total 118628 85072 115281 2.9% 39.4% 1229566 1165376 5.5%
Commercial Vehicles
Tata 44737 38714 35079 27.5% 15.6% 458057 425595 7.6%
M&M 13362 13101 7699 73.5% 1.9% 145134 143173 31.2%
Maruti 9792 10266 14885 -34.2% -4.6% 129269 98542 1.4%
Total 67891 62081 57663 17.7% 9.4% 732460 667310 9.7%
Industry 1279192 1244715 1050740 21.7% 2.8% 13628309 12355504 10.3%
Source: SIAM, Company, R K Global Research
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2. Automobile Monthly
Domestic Market Share in two-wheelers Two-wheeler Segment
The two-wheeler reported robust sales for the month of
Others 3.5 November 2011 by 28% on Y-o-Y basis at 1.3 million units. The
two wheeler industry reports astral performance for the third
TVS 15.6
consecutive month. On M-o-M basis the growth moderated by 1%
to 15.72% Y-o-Y growth in Oct 2011.
Nov-11
BJAL 33.3
HERO 47.7
%
0.0 10.0 20.0 30.0 40.0 50.0 TVS Motors
TVS Motors sales continued to move in line with the industry
TVS Motors: Sales Volume trend on stronger two-wheeler sales in comparison to the overall
Scooter Motorcycle Y-o-Y gr
industry. Overall sales were clocked at 175535 units, an increase
150 54
of 11.8%Y-o-Y (-4.5% M-o-M) growth. Motorcycle volumes stood
at ~62608 units, a decline of 1% Y-o-Y (-17% M-o-M). Scooter
130 44
sales witnessed a growth of 22.3% Y-o-Y (decline 5% M-o-M) to
34
'000 Units
110 44 thousand units. The export segment continued to do well with
24
%
90
68.2% Y-o-Y (11.6% M-o-M) growth clocking 24271 units.
14 Cumulative figures during the period April to November, 2011,
70 4 grew by 12% to 15 lakh units as against 13.4 lakh units sold in the
50 -6 same period last year.
Nov-10 Feb-11 May-11 Aug-11 Nov-11
Bajaj Auto: Net sales & export volume
Bajaj Auto
Commercial Motorcycle Y-o-Y gr
Bajaj Auto posted healthy volume numbers with exports
30
400
providing strong support (up 25.1% Y-o-Y). Total volumes for the
25 month were at 3.7 lakh units reflecting a decent 25.1% Y-o-Y,
'000 Units
350 while on M-o-M basis the company just missed the market
20
expectations to decline at 5.3%. In the two-wheeler segment,
%
300
15 Pulsar and Discover brands (accounting for ~68% of total sales to
2.2 lakh units) continued to be the volume driver. The motorcycle
250 10 sales volume rose 25.3% Y-o-Y (decline -5.4% M-o-M) to 3.3 lakh
units, While export rose 42% Y-o-Y (decline 2.1% M-o-M) in
200 5
November 2011. The three-wheeler segment for Bajaj Auto
Nov-10 Feb-11 May-11 Aug-11 Nov-11
continued its growth of 24.3% Y-o-Y (decline -3.8% M-o-M) to
42510 units.
Hero MotoCorp: Sales Volume
Volume Y-o-Y gr
550 43 Hero MotoCorp
500
38 Hero MotoCorp (HMC), the market leader in the two-wheeler
33 segment, keeps up the momentum of consistent five lakh-plus
450
28 unit sales every month. The company registered volumes of 5.3
'000 Units
400
23 lakhs unit a growth of 28.7% Y-o-Y (4.8% M-o-M). Cumulative
%
350
18 Apr-Nov’11 sales volume grew 10.1% Y-o-Y to 41.5 lakhs units.
300 13
250 8
200 3
Nov-10 Feb-11 May-11 Aug-11 Nov-11
Source: SIAM, Company, R K Global research
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3. Automobile Monthly
Domestic Market Share in Four-wheelers Four-wheeler Segment
Domestic passenger car sales registered a stirring performance with a
GM 3.7 growth of ~18%Y-o-Y to ~2.1 lakhs units sales volume in November
across industry, While the commercial vehicle (CV) segment grows at
M&M 7.7 21.6% on Y-o-Y (10.5% M-o-M). However, this segment would
Nov-11
continue to face challenges on the interest rate front and could receive
Others 11.3
a boost by the end of FY12.
Tata 12.5
Hundai 24.8
Maruti 39.9
% 0 10 20 30 40
Maruti Suzuki India
Maruti Suzuki: Domestic Sales & export Maruti Suzuki India (MSIL) gets relived from its consecutive drop in
volume monthly sales, the company’s total sales increased 65.1% M-o-M
(decline 18.5% Y-o-Y). Passenger vehicles were the main driver for the
Export Commercial company, it increased 77% M-o-M (decline 16.6% Y-o-Y) to 73078
Passenger Y-o-Y gr
130 40 units. A1 and A3 segment increased by 108% & 104% M-o-M to 10403
120 30 and 38921 units respectively. While the SX4 model gets the
110 20
100 10 momentum supported by strong order book, though sales volume
'000 Units
90 0 stood 1433 units (down 87% Y-o-Y). The commercial vehicles segment
%
80 -10
continue to be under pressure, its sales volume decline by 34.2% Y-o-Y
70 -20
60 -30 (down 4.6% M-o-M).
50 -40
40 -50
30 -60
Nov-10 Mar-11 Jul-11 Nov-11
Tata Motors: Domestic Sales & export
volume Tata Motors
Domestic sales of the company have increased by 41% Y-o-Y (13% M-
Export Commercial o-M) to 76823 units; despite the good performance in domestic
Passenger Y-o-Y gr
90 70 segment, the company's exports in the period under review increased
80 60 only by 3.5% at 4349 units. Passenger vehicles were the main
70 50 contributor which increased 75.8% Y-o-Y (11.7% M-o-M) to 28774
40
60 units, while makeover of Nano boosts sales by 65% M-o-M to 6401
'000 Units
30
50 units. The Indica range reported sales volume of 10926 units, up 91%
20
%
40
10
Y-o-Y, while the Indigo segment recorded sales volume of 6213 units, a
30 0 increase of 2.4% Y-o-Y (decrease of 0.9% M-o-M) in comparison to the
20 -10 same month last year. Sales of Sumo, Safari, Aria and Venture segment
10 -20 grew 35% Y-o-Y (0.5% M-o-M) to 4179 units. Commercial vehicle rose
Nov-10 Mar-11 Jul-11 Nov-11 27.5% Y-o-Y, where LCV segment was the main contributor which
increased 40.7% Y-o-Y (31% M-o-M) to 28673 units. M&HCV sales
Source: SIAM, Company, R K Global research stand at 16064 units up both by 9.3% Y-o-Y (decline 4.5% M-o-M).
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4. Automobile Monthly
Mahindra & Mahindra:
Sales Volume (excl. tractors)
Mahindra and Mahindra
Passenger Vehicles Commercial Vehicles
Sales volume Y-o-Y gr M&M reported strong 30.5% Y-o-Y growth in total volume to
85 65
75
58249 units, The automotive sale stood 40722 units during
55
65 Nov’11, a increase of 52.7% Y-o-Y, while in FES segment total sales
45 volume accounted to 17527 units, a decline of -2.6% Y-o-Y (-44.5%
'000 Units
55
45 35 M-o-M). In the tractor space, domestic sales beg off 4.7% Y-o-Y
35 25 (decline 47% M-o-M), while export showed a striking growth of
25
15 32.8% Y-o-Y (2.5% M-o-M). In automotive segment, LCV & M&HCV
15
5 5 sales volume grew by 46.8% Y-o-Y, where as four- wheeler pick up
Nov-10 Feb-11 May-11 Aug-11 Nov-11 segment continued a strong growth of 73.6% Y-o-Y. Automotive
%
export showed astral performance of 71% Y-o-Y (19% M-o-M), to
2563 units during November 2011.
Tractor Sales
Tractor Sales Y-o-Y gr
35 60
30 40
20
'000 Units
25
0
20
-20
15 -40
10 -60
%
Nov-10 Feb-11 May-11 Aug-11 Nov-11
Ashok Leyland: Sales & export volume Ashok Leyland
Ashok Leyland (ALL), the Hinduja group company sales volume
Export Volume Y-o-Y gr
15 60 witnessed astral performance of 53.4% Y-o-Y (26.1% M-o-M), to
13
50 7878 units in Nov’11. Domestic sales scaled up by 66.7% Y-o-Y
40 (11.0% M-o-M) to 6477 units. While exports which were on the
11 30 higher side for many months now, continued its uptrend 11.9% Y-
'000 Units
20 o-Y to 1401 units. The company’s Apr-Nov’11 sales volume
9
10
showed muted performance grew 0.3% Y-o-Y to 57035 units.
7 0
While domestic sales fell 1.5% Y-o-Y to 49478 units, exports
-10
5 surged 14.2% to 7588 units. However, this year there has been a
-20
3 -30
sharp slowdown, especially as the RBI has hiked interest rates
several times, which in turn has increased the cost of truck
Nov-10 Feb-11 May-11 Aug-11 Nov-11
%
financing.
Source: SIAM, Company, R K Global research
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5. Automobile Monthly
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