Statewise Two Wheeler Sales – H1 FY18

Thanks to our readers for the overwhelming response on the Statewise Car Sales report. We received multiple requests to share a similar report for two wheelers as well. We are happy to present the same with this post. The format of the reporting is very similar to our previous post and we have tried to add the additional analysis of the top 2 players in the Industry as a bonus.

Around 95,07,761 Two Wheelers were sold in the first 6 months of previous financial year (Apr’16-Sep’16) – source. The Industry volumes have grown over 10% and have registered a volume of 1,04,96,415 (over 1 crore bikes sold in the first 6 months of FY this year !!!). No wonder, India is the world’s largest two wheeler market.

Statewise & Quarterwise Two Wheeler Sales Data –

  • The Chronology of the Top 4 Zones is very similar to that of Passenger Car Sales.
  • However, some surprises seen in the Top states in South Zone. While Kerala topped the Car Sales for H1, It ranked 4th in South Zone for Two Wheeler Sales!
  • Though TN tops the ranking in South Zone; AP+Telangana is clearly ahead of TN in Two Wheeler Sales!
  • The number of Two Wheelers sold in Uttar Pradesh is humongous. It contributes to ~15% of Nations volumes! It also sells >44% more than the next biggest state in terms of Two Wheeler volumes (Maharashtra)!

Ranking of States basis volumes:

  1. The Top 10 states contributes to >70% of Nation’s Two Wheeler Sales!
  2. UP sells more two wheelers than Gujarat+AP combined! There is a saying in Indian Politics that the Party which has clear majority in UP can easily win national elections. The scenario is something similar here as well – The OEM with major Market Share in UP has a tremendous competitive advantage.
  3. The Zone Wise bifurcation Top 5 states is – West Zone (2 states), South Zone (2 states) & North Zone (1 state).

Hero v/s Honda

This is the most interesting competition the automobile industry will ever witness. We have been extensively covering this topic since a long time. The earlier detailed report on the same could be found here. Post the breakup with Hero, Honda has been very aggressive in terms of network expansion and the surge in Scooter sales have benefited Honda largely. Though Hero Moto Corp sold over 20% more than Honda’s volumes in the first 6 months; Honda has gained lead over Hero in majority states in the Indian market. It is surprising to see that Honda has overtaken Hero Moto Corp in 18 out 33 states in comparison here!

Currently Hero+Honda contribute to over 66% of India’s Two Wheeler Sales. The neck-to-neck competition of these two biggies is a sight to watch. However, the only sore point is that they are playing the game with dated products (Splendor v/s Activa). Any change in the trend will be interesting and how the OEMs respond will be the key differentiator to success.

Statewise Car Sales – H1 FY18

We have been sharing the statewise car sales statistics since FY17 and we are happy to share the H1 stats for Apr’17-Sep’17 today. India is a vast market and the trend changes demographically. It is interesting to see the variance the states offer to the Automobiles market and the way they individually behave as well. Just to explain the complexity of our market, would want to highlight these points –

  • India has 33 states (as per the consideration here & includes the Union Territories such as Pondicherry, etc)
  • Maharashtra alone contributes to ~12% of national volumes!
  • East Zone has highest number of states (13), but volume contribution is the least in 4 Zones
  • In terms of land area, Rajasthan stands No. 1 in India (source). However in terms of Passenger Vehicle (PV) sales, it Ranks 9th! Trivia – Rajasthan is bigger than Oman in terms of area!
  • The Top 2 states in terms of PV sales belong from West Zone. Also West is the No.1 Zone!
  • In FY18, Jammu & Kashmir has witnessed the highest YoY growth (55%) in India!

Statewise & Quarterwise Passenger Cars Sales Data –

Please Note:

  1. The Zones have been ranked as per volumes
  2. In Every Zone, the States have been sorted as per their volumes. Ex: Kerala is the first state in South Zone (as it has the highest volume in the Zone for H1)
  3. Q1 & Q2 sales have been bifurcated accordingly. Also combined H1 sales is mentioned for clarity.

Ranking of States basis volumes:

  • The 33 states have been ranked as per H1 volumes
  • Every state’s contribution to All India volumes have been calculated as well

Industry Comparison with the same period Last Year:

  1. The Passenger Car Industry has grown by 9% in the first 6 months of this FY (v/s previous FY)
  2. Only 3 states have witnessed degrowth in FY18 (Maharashtra, Karnataka & Nagaland)
  3. As a Zone, East has grown the highest at 17% YoY

Global Passenger Vehicles Export Statistics – Countrywise

China is widely regarded as major manufacturing hub of the world and biggest exporter across large variety of goods. Also, China is largest consumer as well as producer of passenger vehicles across the globe. So these two facts imply that China must be leading exporter of passenger vehicles too. But the answer is, NO! Japan, Germany and South Korea are holding the pole position since long time and surprisingly China ranks 21st when it comes to net export. Noteworthy point is all three leading exporters are developed countries and labor cost is on higher side of the spectrum in comparison to emerging countries of the world.

Export is always core to the formulation of trade policies by any Government. Being net export positive helps country to earn income (preferably in $ or €) and generate higher domestic employment. Thus many countries are quite eager to have free trade agreements with other countries and specially trade blocks like NAFTA, Euro Zone, ASEAN et al.

For this analysis I have considered Net Export/Import Volume by deducting the Total Vehicles Sold in the country including imports from the Total vehicles manufactured and shipped from the country to domestic and foreign market. So this is different from the export figures published by each country. This way vehicles imported by the countries are also accounted for. Hence we get a clear picture if country is really having an export advantage.

Net (+)Export/(-)Import = Total vehicles manufactured and shipped from the country to domestic and foreign market – Total Vehicles Sold in the country including imports

ASIA     

JAPAN

Toyota, Honda and Nissan are the front-runner in the game of export, despite the fact, that these and many other Japanese companies do have strong manufacturing base in other markets across the globe. Japanese automakers chose export route since 60s to establish them in global market. Focus is not only on products but there is also great emphasis on process of manufacturing, which help them to keep cost low, without compromising on quality.

SOUTH KOREA

They learnt a lot from their eastern neighbor-Japan. With every passing year Hyundai and Kia are getting stronger and stronger in the global market. In 90s they were considered as cheap alternative to the Japanese products in western markets. Their transformation journey began in 21st century with dramatic change in design language and better quality. Results are pretty apparent now.

INDIA

Unlike Japan and South Korea our export is not led by homegrown companies like Tata or Mahindra but foreign manufacturers like Hyundai, Maruti Suzuki, Renault-Nissan, Ford, VW, GM et al. Yes it certainly helps in generation of employment but not much on foreign earnings side, as these companies have options to take money outside our country, as India allows 100% repatriation of profit. Most of these companies had export led India-entry strategy in first place, which sometimes helps in offsetting low domestic sales, for some of the players.

THAILAND

It was a pleasant surprise to see Thailand as 4th largest exporter in Asia, considering its domestic market is 10th largest in Asia. Thailand is leading exporter to South East Asian trade block, known as ASEAN. ASEAN, Middle East and Australia accounts for 30%, 20% and 20% of Thailand’s exports, respectively. Similar to India, export is led by foreign manufacturers.

EUROPE              

GERMANY

VW Group, Daimler, BMW brings in huge export numbers for Germany, despite being developed country and high wage rate.

SPAIN

Spain is second largest manufacturer from Europe, initially it was little surprise to me, as, I was expecting France or UK to occupy this rank. It is actually biggest beneficiary of free trade zone of Europe thus selling to all neighboring countries. Ford and GM have pumped in huge investment to make Spain their production base in Europe. SEAT is only company from Spain, but it is owned by VW group since 1986. In addition, VW group companies, Peugeot, Renault, all have their export oriented factories in Spain.

CZECH REPUBLIC, SLOVAKIA, HUNGARY, ROMANIA, TURKEY, POLAND, SLOVENIA, SERBIA

All East European countries have low-labor-cost advantage in comparison to Western European countries and benefitted by free trade zone of Europe.

NORTH AMERICA            

MEXICO & CANADA

That is advantage of being neighbor to world’s wealthiest country-the USA, and having free trade agreement called NAFTA. Thus few foreign automobile manufacturers had set up factories in low cost region to export vehicle to high labor cost region. Over the years, Americans have lost jobs because few manufacturers have moved these jobs to Mexico and Canada. Current American President wants to reverse this phenomena and negotiation is on. 

SOUTH AMERICA            

BRAZIL

Has turned net exporter in 2016. Reason is, Brazil is suffering from recession, translating into de-growth in domestic consumption which is leading to underutilized production capacity which has been turned into exports.

Data Source : http://www.oica.net/

(The article is written by the Newest Pundit on the team – Rohan Rishi. You can connect with him at emailrohanrishi@gmail.com)

Indian Car Sales Figures – October 2017

October was a tough month for the Auto Industry and the growth was almost flat. As the figures projected here are the offtake data (dispatches from OEM to dealers); the actual retails will be significantly higher. The lower dispatches here indicate the weak business expected from upcoming month (November) and dealers would’ve also planned to rationalize their inventory. Many OEMs would have also reduced the production in Oct’17 owing to Diwali (and hence plant shutdown during the holidays). Anyhow the sentiments are low post-GST and it’ll be interesting to see how market responds in November. Many important launches are scheduled too in November – the biggest are the New Gen Ford Ecosport and Renault Captur. Both the models are SUVs and will cater to the SUV craze in the sub-continent. The new launches are extremely crucial to revive business for their parent OEMs and lot of hopes are pinned on it.
Let’s look at the modelwise analysis here:

Top 25 selling models of October 2017 –

Top Selling Hatchbacks (entry & mid level) –

Top Selling Premium Hatches –

Top Selling Compact Sedans –

Top Selling Sedans –

Top Selling Compact SUVs –

Top Selling MUVs –