This report provide details about auto sales data in July 2019 and data analysis

1. AUTO-SALES DATA ANALYSIS
July-2019

2.  The monthly automobile sales data for July’ 19 are not at all encouraging as the
automobile sector continues to decline for the 9th consecutive month, due to slowdown
in economy, liquidity crisis, change in emission & insurance norms, fewer model launches,
and poor sentiment.
 Considering the auto component industry grows on the back of the vehicle industry, a
current 15 to 20% cut in vehicle production has led to a crisis like situation in the auto
component sector.
India Auto Sales July’19.. from Bad to Worse..

3. 141905
177722
202806
PVs
Jul-19 Jun-19 Jul-18
Overall Auto volumes - July 2019
1177884
1309617
1389461
2W
Jul-19 Jun-19 Jul-18
17,802
25,142
20,927
42,054
24,385
28,289
CV Tractors
Jul-19 Jun-19 Jul-18
The PV & CV segments were most affected, followed closely
by 2-W by weak infra and economic activity, liquidity impacts
demand. PV volumes remained weak for the 13th consecutive
month and tractor sales were weak during the month due to
rationalization of dealer inventory and weak seasonal demand
by the usual lean monsoon period.

4. Passenger Vehicles Sales Analysis
Companies July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
Maruti Suzuki 109,264 124,708 -12 164,369 -34
M&M - PV 16,831 18,826 -11 19,781 -15
Tata Motors PV 10,485 13,351 -22 17,079 -39
 PVs sales decline by ~30% YoY due to continued dealer inventory correction and weak consumer
sentiment.
 Despite production cuts by OEMs (down 10.5% YoY in Q1FY20) the channel inventory continues to
remain high as the retail demand fails to pick up.
 According to FADA, inventory levels across PV category’s remains in the range of 60-65 days vs.
normalised inventory level of 15-25 days.
 The buyers seems to have deferred the purchases possibly after:
1) they are waiting for some incentives (reduction in GST) from government;
2) are waiting for heavy discounting ahead of BS VI transition from OEMs;
3) lower average cost of EVs which might come up over the next 1-2 years.

5. Four-wheelers: Sales Volume Analysis
MARUTI SUZUKI PVs Sales Analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
Mini 11,577 18,733 -38.2 37,710 -69.3
Compact 59,308 64,727 -8.4 74,373 -20.3
Mid-size 2,397 2,322 3.2 48 48.93
Passenger cars 73,282 85,782 -15 112,131 -34.6
UVs 15,178 17,797 -14.7 24,505 -38.1
Vans 9,814 9,265 5.9 15,791 -37.9
Total domestic sales 98,274 112,844 -12.9 152,427 -35.5
LCV 1,732 2,017 -14.1 1,723 0.5
Total exports 9,258 9,847 -6 10,219 -9.4
Total Sales 109,264 124,708 -12.4 164,369 -33.5
 Maruti Suzuki India reported fall in sales decline YoY, highest fall in almost 6 years in UV sales,
Maruti has taken production cut of 25% in July as well, so things continue to be lukewarm. Company
will withdraw its diesel offerings from April, 2020.
 The company’s Vans segment sales declined as they have discontinued sales of Omni from April’19.

6. MAHINDRA & MAHINDRA PVs Sales Analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
Passenger vehicles 16,831 18,826 -10.6 19,781 -14.9
 M&M is facing stiff competition from its peers in UV space, resulting into contraction in market
share to ~25%. This is after most of its models have failed to uphold. Despite three product launches
(Marazzo, Alturas & XUV3OO) in the past its UV segment reported volume de-growth of 10% YoY.
 M&M hope’s that the overall buying sentiment will improve in the run-up to the festive season.
M&M will be ready with BS VI compliant petrol & diesel vehicles over the next 3-4 months.

7. TATAMOTORS PVs Sales analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
Passenger vehicles 10,485 13,351 -21.5 17,079 -38.6
Tata Motors domestic PV volumes declined after company focused on retail sales thereby helping
dealer to reduce its inventory. The company also increased its retail sales by increasing its footprint
(added 48 new sales point, of which 30 were added in July 2019) thereby supporting sales.

8. Two Wheelers Sales Analysis
Companies July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
Hero Moto Corp 535,810 616,526 -13 679,862 -21
Bajaj Auto 322,210 351,291 -8 332,680 -3
TVS Motor Company 279,465 297,102 -6 321,179 -13
Eicher Motors 54,185 58,339 -7.1 69,063 -21.5
 The overall volumes of 2-W industry, decline 15% YoY remained weak, amid sluggish demand
sentiment & higher dealer inventory.
 2W sales, which derive close to half of their volume from rural areas, also witnessed a sharp decline
in volume YoY on account of the rural slowdown.

9. Two-wheelers: Sales analysis
HEROMOTOCORP 2W Sales analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
Total Sales 535,810 616,526 -13.1 679,862 -21.2
 HEROMOTOCORP’s sales decline was higher than estimates and among its mainstream competitors,
HMCL saw the steepest decline due to higher rural contribution.
 HEROMOTOCORP’s sales declined underperformance especially in scooter segment vs. its peers has
impacted its market share.
 The company’s Upcoming refresh/launch: Scooter ZIR150, - Nov 2019; Dare125 & Duet-E. – Dec
2019

10. BAJAJ AUTO 2W Sales analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
Two-wheeler 322,210 351,291 -8.3 332,680 -3.1
 BAJAJ AUTO for the first time in last 24 months reported YoY decline in its volumes. The company
had outpaced the 2-W industry in the past via aggressive pricing, refresh/new offerings & healthy
export growth.
 Its 2-W volumes declined due to weak sentiment & high channel inventory in the domestic market.

11. TVS MOTORS 2W Sales analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
Motorcycles 108,210 131,331 -17.6 121,434 -10.9
Scooters 105,199 99,007 6.3 118,996 -11.6
Mopeds 52,270 53,123 -1.6 67,426 -22.5
Total 2W Sales 265,679 283,461 -6.3 307,856 -13.7
 TVS MOTORS’s both, 2W sales were below expectations.
 Mopeds continued to drag overall performance at TVS motors, continued their downward trend,
registering double-digit decline

12. EICHER MOTORS 2W Sales analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
Total Domestic 49,182 55,082 -10.7 67,001 -26.6
Exports 5,003 3,257 53.6 2,062 142.6
Total Sales 54,185 58,339 -7.1 69,063 -21.5
 Eicher Motors owned Royal Enfield volumes de-grew for the ninth consecutive month on YoY basis.
Royal Enfield has revised its studio store expansion plans from 350 to 500 stores (of which 250 outlets
would be opened within month & balance by Diwali) for FY20E.
 Eicher Motors’s exports volume reported strong growth as Its 650cc received good response (in local
& foreign market) with waiting period of 4 months. RE expects 650cc production to be 5,000
units/month from Aug 2019

13. Commercial Vehicles Sales Analysis
Companies July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
Tata Motors CV 22,453 35,722 -37 34,817 -36
M&M - CV 20,643 20,645 0 24,824 -17
Ashok Leyland 10,927 12,810 -15 15,199 -28
VE Commercial Vehicles 4,001 4,502 -11 5,916 -32
SML Isuzu 857 1,214 -29 1,130 -24
Atul Auto 3,272 3,704 -12 3,855 -15
 CV Consumer sentiment remains weak, mainly due to the rising cost of vehicle ownership. If the
recent proposal by the Road Ministry to increase the registration fees is implemented, it would lead to
a further rise in purchase cost of new vehicles, especially 2Ws, by up to 2%.
 MHCV truck sales remained affected by slowing economy and increased capacity post axle load norm
revision along with poor freight availability and slowdown in execution of infrastructure projects.

14. TATAMOTORS CV Sales analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
CVs 22,453 35,722 -37.1 34,817 -35.5
MAHINDRA & MAHINDRA CV Sales Analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
Commercial vehicles 15,969 16,394 -2.6 19,284 -17.2
LCV < 3.5T 14,874 14,863 0.1 17,785 -16.4
Other CVs 1,095 1,531 -28.5 1,499 -27
TATA MOTORS’s and M&M’s domestic CV volumes declined as it focused on system stock reduction.
The slowing economy, excess capacity due to increased axle load norm, slowdown in execution of
infrastructure projects, poor liquidity conditions and others have led to severe contraction in total
industry volumes across segment.

15. ASHOK LEYLAND CV Sales analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
MHCV 6,722 8,427 -20.2 10,996 -38.9
LCV 4,205 4,383 -4.1 4,203 0
Total Sales 10,927 12,810 -14.7 15,199 -28.1
 According to management, the demand environment remains challenging & thus expect flattish
volume for FY20E. The implementation of BS VI norms is likely to increase vehicle cost in the range of
13%-20%.
 Ashok Leyland will stop selling BS-IV chassis vehicles by January 2020 but expects to sell fully built
BS-IV vehicles till March2020.
 The company had shut down its Pantnagar plant for a few days in July 2019.

16. Tractor Segment Sales Analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
M&M 19,992 33,094 -40 22,679 -12
Escorts 4,860 8,960 -46 5,610 -13
 The sale of tractors meanwhile, widely dependent on the monsoon, has gone down in recent
months due to lower Rabi sowing and subdued farm sentiments. Further, an uneven monsoon
forecast is likely to curtail the growth which this segment has seen in the last three years.
 M&M tractor sales continued to remain weak & the company reported 6th consecutive month of
YoY decline in its volumes. M&M hope’s that the spread of monsoon, government initiatives to
increase rural incomes through farm & nonfarm sources and an overall improvement in liquidity
will spur improvement in tractor demand in H2FY20.
 ESCORTS reported decline in volumes for the 4th consecutive month on YoY basis. According to
management industry sentiment remains negative primarily on the back of delayed onset & uneven
monsoon, lesser sowing & slowdown in commercial activity.

17. 3W Sales analysis
In Units July 2019 June 2019
Growth in
MoM%
July 2018
Growth in
YoY%
M&M 4,674 4,251 10 5,540 -15.6
BAJAJ AUTO 59,320 53,333 11.2 67,663 -12.3
TVS MOTORS 13,786 13,641 1.1 13,323 3.5
Total 3W Sales 77,780 71,225 9.2 86,526 -10.1
Three Wheelers Sales Analysis
3W sales have reported a robust performance in exports due to rapidly transform the overall EV
adoption rate in the country and the surging demand for three-wheelers produced in India in contrast
to domestic sales. This could be possible primarily due to enormous demand for the Indian three-
wheelers in Asian and African regions.
We expect the slowdown to continue in the second half of FY20 and BS-VI transformation and
sharp price increase related to BS-VI would keep automobile sales under pressure. The
tightening of credit rules by financial institutions and a high base effect of the first half of the
last fiscal are expected to keep a tight leash on dispatches in the months ahead even though
we expect sales to recover, though marginally, with the onset of the festive season.

18. Disclaimer
Prepared By:
Research Associate: Nawanit Kumar Pandey
Email ID: nawanitpandey@adroitfinancial.com
Phone Number: 0120-4550300*270/388
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