Indian Car Sales Figures – May 2017

‘I QUIT’ – these are the hardest words for anyone to utter. Generally an employee would quit an organization if he/she us not happy with the culture the company offers or if the growth opportunities are not ample or the remuneration is not adequate. Though we can cite many other reasons; these three looked suitable for the case presented here (General Motors exit from Indian market) –

  • Culture – While, Indian Government has promised a thriving environment with the promise of ‘Make in India’, tax-free zones, etc the policies have never been stable or OEM-friendly. Firstly acquiring land for setting up plant can have multiple hassles (or term it government approvals, land acquisition troubles, etc), policy changes have been pretty frequent as well. OEMs were taken by shock when NGT initiated Diesel-vehicle ban was temporarily imposed by Supreme Court; also sudden transition from BS3 to BS4 emission norms for all category of vehicles was threatening to 2-wheeler and commercial vehicle manufacturers. Even the home-grown Tata had gone through some of the troubles mentioned here. Recent news of jumping to BS6 norms by 2020 and all-electric vehicles by 2030 has made all OEMs wary about the amount of investments that’ll have to be made to survive in the Indian market.
  • Growth Opportunities – India has been an extremely competitive market where the top 4 players hold over 75% of market share. GM has struggled in its over 20 years of existence in the subcontinent. It played several bets (and with several brands) – initially with Opel, then Daewoo inspired models (say the matiz aka spark), then the Chevrolet and finally SAIC inspired models (Enjoy, Sail Twins). Also they expanded their network aggressively between 2011-15 pushed them harder to look into newer models to better the network profitability and sales volumes. However, the bets failed every single time! The reason the strategy failed – It was overly controlled by the Headquarters (Detroit). While Indian market had been extremely dynamic from beginning; GM lacked the leadership who could take progressive steps for the OEM here. They were busy doing the postmortem after every failure. The Karl Slym era was though extremely promising (during which the bestsellers touched the subcontinent – Beat & Cruze). But, even Karl left the path in between.
  • Remuneration – India has pre-dominantly been a hatchback market, which means lower margins for the OEMs and high initial investments (as the MNCs do not have the expertise in small cars). The amount of sales and margins the Global biggies make in the bigger markets is insane – Ex: Chevy sold 5,74,876 units of its best seller Silverado (stands No.2 in the best selling cars/trucks for US market) in 2016, which converts to 47,906 units/mth. The average price of this model is $50,385 (>Rs.32 Lakhs). When you compare this with the stats of its Indian sales, the numbers are extremely meager. Hence justifying the investment becomes all more difficult here. The same concern is troubling all other biggies (say VW, Toyota, Ford, etc). Look at the excerpt from ET

However, we believe GM has made an unforgivable mistake. Exiting Indian market at this stage has ensured that it wont be able to re-enter the Indian market (no more bets please!) and also the brand has taken an irrevocable downfall. GM forgot that it needed only 1 good product to gain its hold in the market (like what Duster/Kwid had done to Renault, Innova to Toyota, etc). It should have also learnt from the likes of Tata Motors which had struggled during the years and is now a formidable challenger to the No.4 slot. But it is both GM’s and Indian Consumers (who had bought Chevy products over the years) loss! It is also unfortunate to see that brands such as Peugeot, Kia are entering (or re-entering Peugeot’s case) and GM is giving up on the market.

Coming to May’17 business, it was a tough month for OEMs as consumers were confused to wait for clarity on GST implications and finalize their purchase. Also dealer fraternity were wary on the effect GST would have on the cars that were shipped from OEM to their stockyards. However, the Industry stood well and posted double digit growth. Good Monsoon forecast has positively supported consumer sentiments as well. While majority of the OEMs had a positive YoY growth; the likes of VW & Toyota experienced a fall in overall sales when compared to the same period last year. Let’s look at the modelwise analysis here:

Highlights:

  1. Nexa Channel (with S-Cross, Baleno, Ignis & Ciaz) posted a sales of 26,120 units! If we consider it as a different channel/brand than Maruti; it’ll emerge to be the No.3 player in the Indian market. Don’t be surprised to see it in the No.2 slot if the momentum continues in the coming times.
  2. Dzire launch was also in the news – The volume cruncher is now bigger and better! Huge aspirations now on the model and we are sure that it’ll deliver.
  3. Another important launch was VW’s Tiguan – In a segment which has always been dominated by Fortuner; it’ll be interesting to see how VW’s offering will fare. Only time’ll tell.
  4. GM’s exit (which was announced on 18th May) has already been discussed in detail. Now we can slowly see the numbers dwindling away from the above chart in coming months.
  5. Hyundai’s refreshed offerings – Grand i10 & Xcent did average. A mid-life makeover has ensured that the models continue their average volumes as last year and avoid degrowth. However, i20 & Creta have been the money-makers for both Hyundai and its dealer partners.
  6. Honda has 2 models in the Top 25 chart in May’17 – City & WRV. This signifies the importance of having refreshed/new products in the portfolio. This has also been the reason behind 13.3% YoY growth posted by the Japanese automaker.

Look at Top 25 selling models of May 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 –

Top Selling SUVs –

May 2017 Car Sales – Snapshot

While the Industry was facing the heat of implementation of GST; only Toyota & VW (among the mass market brands) de-grew in May’17. Also the time couldn’t have been tougher for the luxury brands – From Demonetization to GST the ride has been very volatile for the Premium Auto Makers. May’16 also marks the exit and hence the sudden decline of the sales of General Motors (even then it posted figures more than that of Fiat!).

Indian Car Sales Figures – April 2017

April was a month of many surprises for the Indian Passenger Vehicle Industry – the industry surpassed the growth forecast and grew by a splendid >15% in the first month of FY18! The Industry Leader Maruti Suzuki posted a sales of over 1.44 Lakh units which was its ever highest figure! Maruti again crossed the 50% Market Share and looks even stronger with the New Dzire launch on the cards.

April is generally a dull month for the Industry, but the numbers are surely encouraging. With GST roll out nearing by; it’ll be interesting to see how the market responds in May & June. Also to note that apart from the New Dzire launch there are no big launches scheduled in the next 2 months.

A look at the model-wise Sales for Apr’17:

 SNAPSHOT:

  • Swift was reigned the No.1 Selling car in Apr’17. It outsold the leader Alto by quite a margin and grew hefty 52% over same period last year.
  • With the Gujarat Plant seems to gain pace, Baleno numbers have grown strongly in the past few months. It did a staggering >17k units in Apr’17 and has surely eased the waiting period for the model. The RS variant also looks to have added volumes to the model.
  • Hyundai i20 sold more than the recently refreshed Grand i10. It again shows how value conscious the Indian consumer is and would not shy to pay a premium for the car it loves!
  • Apart from Maruti & Hyundai; no other OEM could find a place in the TOP 10 table! Renault’s Kwid was pushed to No.11 as well.
  • 10 out of Top 15 selling cars were from Maruti Suzuki! This shows how well the Indo-Japanese company has evolved itself, just look at the cars which have topped the numbers – Swift (No.1 Hatch), Baleno (No.1 Premium Hatch), Vitara Brezza (No.1 Compact SUV), Dzire (No.1 Compact Sedan), Omni (No.1 Van), Ciaz (No.1 Sedan), Ertiga (No.1 MUV). You name a segment and you’ll find a Maruti product there.
  • Hyundai is now heavily dependent on 3 models (i20, Grand i10 & Creta). While the competition is getting tough, the performance of these 3 models will define Hyundai’s volumes for that particular month (In Apr’17, ~34k units were contributed by these 3 models). Hyundai needs a fresh model to strengthen its hold.
  • Mahindra is struggling hard to maintain its numbers. In Apr’17, Fortuner sold more than XUV500! Also the new kids (TUV & KUV) sales have dwindled over time. The perception of quality and service has surely effected the brand and it needs to do something new to bounce back. See how Mahindra’s Market Share has eroded in UV’s:
Source: Money Control
  • Honda has posted a good YoY Growth (38% to be precise) backed by the volumes from the new models (City Refresh & WRV). However, Ciaz outsold the City in Apr’17 and the fight is going to get more tougher for Honda as Ciaz moves to Nexa. WRV has garnered positive reviews for the heavy feature list it is offering at the price. However, it needs to fight the mighty Brezza & settled Ecosport for volumes.
  • Toyota continues its dream run with its blockbuster models (Innova & Fortuner). It is still a mystery on how Toyota still manages to do it (mystery can be decoded as the perception of Quality, Durability & Reliability of Toyota products with Indian buyers 🙂 )

Top 25 selling cars of Apr’17 –

Top Selling Hatchbacks (entry & mid level) –

Top Selling Premium Hatches –

Top Selling Compact Sedans –

Top Selling Sedans –

Top Selling Compact SUVs –

Top Selling MUVs –

Top Selling SUVs –

April 2017 Car Sales – Snapshot

The Indian Auto Industry registered a double digit growth in the first month of the Financial Year and was backed by Market Leader Maruti’s stellar performance. Maruti yet crossed 50% Market Share and grew over 23% when compared to the same period last year! The other Japanese Giants (Toyota, Honda & Nissan) too grew strongly with a YoY growth of 52%, 38% & 39% respectively. Mahindra & Renault had a tough time with the newcomers (KUV, Kwid) not matching previous years success run. The post-demonetization woes doesn’t seem to end for the Luxury Car makers and not a single OEM posted a positive growth!