Domestic sales for most of the Automobile OEMs have continued to maintain their recovery in the month of August 2017 after they declined in the month of June 2017 and sharply recovered in the month of July 2017. In the first month since the Goods & Services Tax was introduced, the automobile sector, one of the major beneficiaries due to reduced taxation in all vehicle categories other than hybrids, is seeing a smart uptick in demand. And in the run up to the festive season which has begun in the month of August, consumer demand is already burgeoning.
The industry produced a total 1,19,50,356 vehicles including passenger vehicles, commercial vehicles, three wheelers, two wheelers and quadricycle in April-August 2017 as against 10919510 in April- August 2016, registering a growth of 9.44 percent over the same period last year.
The sale of Passenger Vehicles grew by 8.67 percent in April-August 2017 over the same period last year. Within the Passenger Vehicles, Passenger Cars, Utility Vehicle and Vans grew by 6.57 percent, 15.97 percent and 2.27 percent respectively in April-August 2017 over the same period last year.
Maruti Suzuki India, which posted its highest-ever monthly sales in July 2017 (153,298 units / +21.9%), has clocked another month of robust sales. In August 2017, the carmaker sold a total of 151,270 units (+26.2%), showing there’s little the competition can do to impact the company’s stranglehold on the domestic market.
Mahindra & Mahindra sold a total of 19,325 units in August 2017, which marks 6 percent YoY growth (August 2016: 18,246).
The overall Commercial Vehicles segment registered a growth of 1.58 percent in April-August 2017 as compared to the same period last year. Medium & Heavy Commercial Vehicles (M&HCVs) declined by (-) 13.6 percent, however, Light Commercial Vehicles grew by 12.37 percent in April-August 2017 over the same period last year.
After a tepid Q1, growth continued for the second straight month in August. All the key OEMs have clocked sizeable growth. Importantly, sales of the critical medium and heavy commercial vehicle (M&HCV) sector have maintained an upward trajectory. If there is a concern, then it relates to slow sales of M&HCV buses and LCV passenger carriers.
The higher overall growth indicates that OEMs have been able to address bottlenecks in the supply chain and streamline their BS IV production. It also appears that fleet operators are now gradually upgrading their fleets as their initial concerns pertaining to BS IV vehicles efficiencies, production ramp-up and uncertainty about prices after GST have now largely been addressed.
Three Wheelers sales declined by (-) 16.26 percent in April-August 2017 over the same period last year. Within the Three Wheelers, Passenger Carrier sales registered a de-growth of (-) 20.55 percent, however, Goods Carrier grew by 3.51 percent in April-August 2017 over April-August 2016.
Two Wheelers sales registered a growth at 10.41 percent in April-August 2017 over April-August 2016. Within the Two Wheelers segment, Scooters and Motorcycles grew by 18.27 percent and 7.89 percent respectively, while Mopeds declined by (-) 8.6 percent in April-August 2017 over April-August 2016.
Hero MotoCorp has reportedly clocked its highest-ever sales for any single month in August 2017. It sold total of 678,797 units including exports (17,307 units) for the month. Domestic sales at 661,490 units were up 10.02 percent. Hero’s previous highest monthly performance was in September 2016 (674,961 units). August 2017 marked the fourth consecutive month when Hero MotoCorp has managed to sell more than 600,000 units.
The good performance of most of the Two-Wheeler OEMs can be attributed to the revival in rural demand backed by above average rainfall, positive market sentiment, GST-driven price cuts and low channel inventory.
In April-August 2017, overall automobile exports grew by 10.27 percent. While Passenger Vehicles, Three Wheelers and Two Wheelers registered a growth of 2.62 percent, 17.27 percent and 13.82 percent respectively, Commercial Vehicle exports declined by (-) 33.08 percent in April-August 2017 over the same period last year.