Everyone believed Yaris shall revive slowing Executive Sedan sales post it was showcased in the 2018 Auto Expo. Toyota launched it with all the fanfare on 18th May 2018 and it did bring customers to Toyota showrooms. However; the value conscious Indian Consumer was not ready to pay the premium Toyota wanted to command on its brand value and additional safety features it offered. Pricing definitely played its ploy and led to the fall Yaris sees till date. The segment now reels with a failed new launch and the segment leaders volumes falling down with every going month. May’19 was no different and the segment degrew -29% v/s May’18.
Snippets of segment performance –
Ciaz holds the Top Spot and sold over 1k units from second in segment Verna. All Ciaz, Verna & City have been closely fighting for becoming the segment leader and every month there is a tough competition for the spot (Verna was the top selling executive sedan in Apr’19).
Vento sold almost equal number of Rapids! It also grew a YoY 20%. Don’t understand the sudden surge in Vento’s volumes.
Next to Yaris; Verna saw the steepest decline at -32% YoY. Focus shifted to Venue?
The much awaited sub-4m Compact SUV offering from Hyundai – The Venue was launched with full pomp and show on 21st May. Touted to be the ‘Brezza-killer’; Venue was launched with an extremely aggressive price and exhaustive list of features. Hyundai seems to have planned well and matched the hype with an ambitious dispatch of 7,049 units to its dealer partners. The end customer demand is equally enthralling for Hyundai – It has already received near to 25,000 bookings till date and the figure is likely to double by Diwali! Hyundai has now put all its ammunition to topple the segment leader Vitara Brezza off its perch. The effect is already seen in May’19 – Brezza degrew a hefty -44% YoY (May’19 v/s May’18).
Snippets of the segment performance –
The segment saw a double digit growth owing to 2 new models launched recently – Hyundai’s Venue & Mahindra’s XUV300. Undoubtedly this shall be one of the most happening segments in this fiscal year.
Brezza volumes saw a steep fall and it registered its lowest number in past 23 months! The May’19 numbers for Brezza almost halved as the same month in 2018.
Venue has stirred a lot of excitement in the market and is clearly visible in the booking stats and dispatch volumes. Venue’s success shall be crucial for Hyundai to gain significant market share and sustain its volumes in FY20.
Mahindra XUV300 fares well and sells >5k units in May’19. It places itself into third position ahead of Nexon & Ecosport.
WRV & TUV continue their downward trend and their volumes are decreasing with every passing month.
Tough times persist for the Indian Auto Industry and even tougher times lurk ahead. The Passenger Vehicle sales saw a dip of -21% in May’19 v/s May’18. The de-growth extent is now increasing every month and has questioned the viability of many dealer establishments. Considering the stats – on an average two vehicle dealerships have shut every week over the past two years! With the Indian automotive retail sector incurring losses of at least Rs 2,000 crore in this period, over 205 dealers have wound up operations and shut 300 outlets as their business turned un-viable and an estimated 3,000 people have lost their jobs.
Base effect along with high finance cost and liquidity constraints has primarily pushed to subdue automobile sales in May. Lower consumer sentiment and the recently concluded general election also had a major part in sales slowdown. The high inventory levels at the dealerships has been a consistent concern and all OEMs are trying their part to lower the dealer stock which is even more hampering the monthly offtake volumes.
Let’s see how the OEMs fared in May’19 –
The nation’s top automaker, Maruti Suzuki reported the highest Market Share fall in May’19. It lost a staggering 3.1% MS in May’19 owing to low wholesale volumes in the month. It registered a YoY degrowth of -25.1% and Maruti’s loss was primarily Hyundai’s gain.
Hyundai was the biggest winner in May’19. Though it saw a degrowth of -6%; the OEM registered an increase of 2.9% in terms of Market Share. A lot of this success could be attributed to the launch of the sub-compact SUV Venue.
Mahindra establishes itself as a clear No.3 post XUV300’s launch and sells a staggering 7,403 units more than the 4th ranked Toyota.
Toyota topples Tata & Honda to become the 4th best-selling OEM. Glanza effect? We shall let you know shortly.
Tata grappling with low performance? Maybe yes, maybe no. Tata has recently taken a stand to lower dealer stock and is clearly visible from the recent communication it shared to its channel partners –
Nissan+Datsun are unable to understand on how to recover from the monthly shortfall. The OEM registered the highest YoY degrowth at -48%. No wonder; in 2017-2018 Nissan had the most number of dealers shutting shop (38 dealers to be precise)!
Another shocker of May’19 was the decline of FCA volumes. FCA now ranks last in the table and Skoda has effectively pushed the Italian carmaker to the bottom. Fiat is primarily on its deathbed and could sell only 14 units in May’19; while Jeep sold a meager 977 nos in the past month.