 "Auto sales slacken ahead of festive season")
Weeks ahead of the festive season, automobile volumes remained muted in August. The two leading automakers that posted volume growth, Maruti and Hyundai, managed to do so on the back of new launches. Sales for August have not shown any pick-up, though the festive season starts in September.
Maruti’s nine per cent year-on-year (y-o-y) volume growth has been driven by the ‘S-Cross’, just as Hyundai’s 20 per cent volume growth has been fuelled by recently-launched SUV ‘Creta’.
Overall, the passenger vehicles segment has grown eight per cent but analysts claim the growth is driven by new launches. Volumes of other auto companies have stayed flat, compared to last year. The volumes of Honda declined seven per cent y-o-y and Mahindra & Mahindra (M&M)’s passenger vehicle sales dipped two per cent.
JM Financial is of the view that retail demand over the next two-three months (peak festive period) would be critical for the passenger vehicle and two-wheeler segments, given the above-normal inventory in the system as of now and higher base in the second half of FY16.
The bigger pain is in the two-wheeler and tractor segments. Typically, in the months preceding the festive season, dealers build inventories and sales tend to pick up but August sales do not seem to be showing this trend.
Hero MotoCorp reported a 14 per cent volume decline in August. Bajaj Auto and Honda Scooter and Motorcycles grew at two per cent. Bajaj Auto’s volume growth was led by exports; domestic volumes remained flat.
Tractors as a category has also suffered due to continued rural stress. Both M&M and Escorts reported volume decline of 22 per cent and 25 per cent y-o-y in August, as sentiment in rural India remained subdued.
Commercial vehicle sales grew a healthy 40 per cent in August, as a revival in mining has led to demand for medium and heavy commercial vehicles. Light commercial vehicle sales continued to decline.
Explains Angel Broking’s Bharat Gianani, “Better freight availability due to improving economic activity, along with resumption of mining and increase in the allocation for roads, has bolstered growth in the medium and heavy commercial vehicle segment.”
Maruti’s nine per cent year-on-year (y-o-y) volume growth has been driven by the ‘S-Cross’, just as Hyundai’s 20 per cent volume growth has been fuelled by recently-launched SUV ‘Creta’.
Overall, the passenger vehicles segment has grown eight per cent but analysts claim the growth is driven by new launches. Volumes of other auto companies have stayed flat, compared to last year. The volumes of Honda declined seven per cent y-o-y and Mahindra & Mahindra (M&M)’s passenger vehicle sales dipped two per cent.
JM Financial is of the view that retail demand over the next two-three months (peak festive period) would be critical for the passenger vehicle and two-wheeler segments, given the above-normal inventory in the system as of now and higher base in the second half of FY16.
The bigger pain is in the two-wheeler and tractor segments. Typically, in the months preceding the festive season, dealers build inventories and sales tend to pick up but August sales do not seem to be showing this trend.
Hero MotoCorp reported a 14 per cent volume decline in August. Bajaj Auto and Honda Scooter and Motorcycles grew at two per cent. Bajaj Auto’s volume growth was led by exports; domestic volumes remained flat.
Tractors as a category has also suffered due to continued rural stress. Both M&M and Escorts reported volume decline of 22 per cent and 25 per cent y-o-y in August, as sentiment in rural India remained subdued.
Commercial vehicle sales grew a healthy 40 per cent in August, as a revival in mining has led to demand for medium and heavy commercial vehicles. Light commercial vehicle sales continued to decline.
Explains Angel Broking’s Bharat Gianani, “Better freight availability due to improving economic activity, along with resumption of mining and increase in the allocation for roads, has bolstered growth in the medium and heavy commercial vehicle segment.”