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Auto Sales Number Update - November,2013 - Sector Update




Kisan Ratilal Choksey Shares and Securities Private Limited


06 Dec 2013





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Auto Sales Number Update – November,2013 - Sector Update “Subdued Festive season, Hopes Alive” Industry The Auto sector posted subdued numbers for the month owing to the tough macro conditions visible from the low GDP growth rate of 4.4% in Q1FY14 and 4.8% in Q2FY14. High inflation resulting in low purchasing power of Indian consumer is deferring their buying decision of owning an automobile. 2-W & 3-W Segment: The 2 wheeler segment has been the lone performer in this gloomy market due to strong rural demand. But 2 wheeler sales slowed down after the festive season buying to ~5% Y-o-Y but decline ~15% sequentially in-line with the seasonal trend. Honda continues its bull run with growth of 43% Y-o-Y, Hero Motocorp saw sales growth tapering to 5%, while Bajaj and TVS saw sales falling by 15% Y-o-Y and 7% Y-o-Y respectively. Hero crossed another milestone with sales of 1.2 million units for any Oct-Nov period. On 3-wheeler front TVS motors yet again reported positive growth of 25% on y-o-y basis to 6304 units whereas, Bajaj Auto reported disappointing numbers in 3-wheeler segment down by 30% y-o-y and 14% M-o-M. Four Wheeler & CV Segment: Market scenario continues to be challenging for the PV and CV segment. Sales for Maruti declined 11% Y-o-Y and 12% M-o-M to 92140 units. For Tata Motors sales for PV’s dropped to 8222 units down 41% Y-o-Y and 28% M-o-M. The CV industry continues to be in doldrums with sales of Tata Motors CVs falling by 38% Y-o-Y and 19% M-o-M while Ashok Leyland clocked units of 5375 units down by 27% Y-o-Y and 21% M-o-M. The CV players continue to maintain their positive outlook for the Indian markets and have show this in form of new product launches.(Ashok Leyland boss, Eicher’s new range, etc). The drop in November sales is inline with industry trend since sales taper of after the festive season. Sector Overview Segment Nov-13 Nov-12 Y-o-Y Oct-13 M-o-M Bajaj Auto 310,591 372293 -17% 385,323 -19% Hero Motocorp 530530 502305 6% 625420 -15% Maruti Suzuki 92140 103200 -11% 105087 -12% Tata Motors 40863 66500 -39% 51638 -21% TVS Motors 161908 171837 -6% 197905 -18% Ashok Leyland 5375 7370 -27% 6803 -21% Source: Company, KRChoksey Research Outlook: The Sales for November were lower, inline with the seasonal trend since most buying has already been completed in previous month. The biggest dent was observed in the CV segment. But all is not lost for the Indian auto industry thanks to the government efforts such as awarding new infrastructure projects, stabilizing of the rupee, reduction in CAD, improving demand from exports markets such as China and Africa, and bullish GDP outlook of 5% all show signs of the improving Indian economy. New Launches and refreshes from the passenger vehicles manufacturers in 2014 (roughly 22 launches and refreshes) will prove as mouth watering treat to consumers to make new purchases.

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