It may be the festive season, but with scarce and costly credit have kept buyers away from the motorcycle market. Bajaj Auto saw its October volumes come off by as much as 34 per cent though Hero Honda fared better.
However, Bajaj Auto could well see net profits (before exceptionals) fall in FY09 from Rs 868 crore in FY08. Profits could be lower for Maruti Suzuki too because business has been dull in the car market. Volumes at the Rs 18,142 crore Maruti Suzuki were weak, coming off by 8 per cent in the home market.
That was not expected after the 2.5 per cent rise in September and after a fall of 11 per cent in August. It’s the Swift and DZire that are driving Maruti’s numbers, the older models aren’t really doing so well with the result that volumes for Maruti between April-October are up just 2.5 per cent. Rival Hyundai Motor did well in August and September with volumes up 34 per cent and 24 per cent respectively, but the Korean player too is showing signs of a slowdown.
So far, 2008-09 has been disappointing for car makers though the new Indica Vista from Tata Motors is believed to have seen a fairly good response with a waiting period of six weeks. Even with that, volumes dropped 6 per cent in October. So Tata Motors may well sell fewer cars this year than it did in 2007-08.
For Maruti, the A-Star, expected to be launched this month, could spark a turnaround. Maruti’s profit though could come off by about 10 per cent this year from Rs 1731 crore in FY08. Utility vehicles maker, Mahindra and Mahindra has had a mixed year so far — October saw a sharp decline of 20 per cent whereas September had seen a rise of 30 per cent.
Perhaps the new Xylo, a multi-purpose vehicle (MPV) planned for December will help revive its fortunes. Already margins for the automotive segment were down sharply by over 700 basis points in the September 2008 quarter with the profit before interest and tax down by nearly 50 per cent.