· July fares as per the expectation – Being an inauspicious timeline (hindu calendar – Ashada) where most of the customers prohibit any financial decision; car industry is the worst hit during the period. July also saw huge discounts floating in the market to revive consumer interest and struggled to arrive at the current position! The industry reportedly dropped over 7% vis-à-vis last year and is expected to report the lowest numbers in the current calendar year. July 2013 would also be the NINTH consecutive month where the auto sector has witnessed de-growth!
· The Indian Auto Industry was never so competitive and volatile. It is a period of “ONE PRODUCT WONDER” – OEMs such as Maruti, Renault, Ford & Honda could post growth only riding on the sales of their Wonder Products (Dzire, Duster, Ecosport & Amaze respectively). The industry has also been harsh on segments – in a time where we expected MUV/SUV to grow despite the turmoil; the Government imposed SUV taxes curbed this part of the success story too. The worst hit automaker from the policy proved to be M&M – its passenger car division saw a decline of 29 percent. The SUV major is forced to have planned plant shutdowns and announce non-production days to rationalize the lowered demand.
· Although Maruti Suzuki domestic sales grew by 5.8 percent, the growth cannot be justified – as Maruti had faced low production rate owing labour dispute during the month. However, Dzire proved to be savior again with an offtake of 15249 units. Alto family supported will with over 18k units. The performance of Swift and Ritz was the biggest disappointment with the brands de-growing 8% & 23% YoY respectively. The new found LUV (Ertiga) too had to face the heat and de-grew by a hefty 36% YoY in July (can you guess who’s “ENJOY”ing the scenario?). Zen Estilo, A Star & SX4 remains the pain brands for the automaker and show no hopes for their revival. Petrol-only Wagon R surprised all with an offtake of 13409 units.
· Hyundai also took the planned periodic annual maintenance shutdown of its production facilities to cater the reduced demand. No wonder the Korean OEM de-grew by 6%. Eon, i10 & Elantra proved to be the heroes in distress and displayed significant Yoy growth of 39%, 10% & 709% respectively. It also means that petrol models are still fighting out the battle for survival.
· The Indian UV major M&M may soon lose the touted third spot to Toyota. The gap between the 2 auto makers has reduced to just over 1k units. Mahindra’s dark horse Bolero too seems to reel under pressure – It is the first time in past 22 months that the brand has witnessed an offtake of less than 7k units!!! (Previously reported in Aug 2011 – 6554 nos.). Scorpio still stands till tall in its segment and refuses to bow to Duster (Scorpio – 3256 units, Duster – 3089 units). Quanto may soon follow Aria’s footstep – a capable offering to fail, owing to market dynamics. Verito + Vibe posts a disappointing tale – combinedly does 1027 units (Dzire & Amaze galore!). XUV 500 bounces to 2k figures – thanks to the reduced excise duty and an effective price revision of over 33000 rupees.
· Toyota is leaving no stone unturned in terms of reviving Liva & Etios – the brands still performs far below expectation and manages to cross 2k and 2.5k units respectively. Innova too ends up performing over 4.5k volumes. Fortuner emerges as the star performer with 1669 nos and ends up awing us all (don’t be surprised to see Fortuner volumes overtaking Liva & Etios figures in some months!)
· Honda is reaping its seasonal fruit – the much awaited first diesel offering from Honda performs as expected and posts its all-time highest offtake! The Brio too joins the party and contributes 2.6k units. City lies low and manages to near 2k nos. In overall – Honda reported a sales growth of 156 percent during July selling 11,223 units, compared with 4,386 units in the corresponding month in 2012. All thanks to Amaze – the company now plans to start a third shift from November to reduce the waiting period.
· Following Honda’s footstep is Ford – it made us wait over 18 months to launch the Ecosport – since it was showcased in Auto Expo. The compact SUV has taken the consumers by storm and is now commanding a waiting period of over 8 months. Who said the industry was facing a slowdown! Ford’s Domestic sales also went up by 26.15 per cent to 7,867 units in July this year as against 6,236 units in the same month last year. The company now seems to shift its entire focus on Ecosport – other brands such as Figo, Fiesta & Endeavour seems to be forgotten – bad move Ford!
· General Motors announced India’s one of the largest vehicle recall in July’13 for Tavera. It is also experiencing trouble in manufacture of Sail twins. However, the impact was low and the US automaker managed to post a 10.73 percent decline in sales at 6,503 units, compared to 7,285 units in the same month last year. The fight was well supported by Beat & Enjoy. The newly launched MUV is sailing at an average ~2.2k units and its success is very much required by its OEM.
· Renault’s multi-crore pan India campaign of 2 years celebration offer couldn’t pull the volumes to grow significantly. In a Month-on-Month comparison (July’13 v/s June’13) – Duster, Scala, Fluence & Pulse degrew by 32%, 52%, 41% & 95% respectively. The new brand ambassador of Pulse (Anil Kapoor) also failed to revive the brand. Renault would have a tough time once Terrano is showcased in August.
Considering the current scenario, August too seems tough and the auto makers would be in tremendous pressure to perform. Be assured of high-discounting and heavy marketing of cars this festive season! The only positive in the entire fiasco would be – “It is the best time to be a car buyer – plenty of options and equally lucrative discounts J”.