FY2014-15 Performance Snapshot – Cars & 2 Wheelers

Performance Snapshot of Car & 2-Wheeler OEM’s for Financial Year 2014-15

Indian Auto Industry witnessed a sale* of 26,01,111 cars & 1,60,04,581 two-wheelers in the previous financial year! While a single digit (4%) growth was seen for passenger cars, 2 wheelers had a similar performance and could post only 8% Year-on-Year growth. The Industry had a tough time last financial year – however, only the BEST could survive and project impressive growth. New launches were critical in both sectors and supported the respective OEMs.

Passenger Cars Segment:

India’s Top Passenger Car OEM’s

Maruti Suzuki successfully held it’s numero uno position (with Market Share of 45.01%) and the growth of 11% is just commendable! The OEM was able to successfully launch Celerio & Ciaz (co-incidentally both the car name starts with a ‘C’) and had the fitting replacement to its non-performing models (say Zen Estilo, A-Star, SX4). It also introduced India to AMT and we became the pioneer in world’s cheapest automatic option. The AMT was later fitted to Alto K10 and found acceptance here as well. We expect the new premium hatchback & compact SUV to further strengthen the OEM’s presence in the market.

Last year Hyundai proved to be the most aggressive of all car makers in terms of new product launches. Right from Grand i10 to Xcent, New i20 elite to Active the Korean automaker did tick all the right boxes (and could obtain Market Share of 16.17%). However, the sales of i10 & Verna couldn’t sustain the tough competition (from its  own new launches as well!) and saw tremendous decline.

M&M could not do much in previous financial year – except the refreshed Scorpio, the Indian UV major couldn’t get excitement in its portfolio. Its bread-and-butter model – Bolero could not post the usual numbers as well due to poor rural sentiments and less rains. Its 3rd position is strongly challenged by Honda and we foresee the Japanese OEM to clearly overtake M&M this financial year. M&M is pulling its socks and is planning a slew of launches (say refreshed XUV, micro SUV S101, next-gen Bolero U301, Quanto facelift) to fight Honda’s challenge.

Honda clearly was the most successful OEM in the previous financial year. Amaze & City were undoubtedly the pillars for its success and the diesel engine just laid the architecture for overall growth. It neatly overtook M&M’s volumes many times last year and seems poised to clearly rank third this year. With the new Jazz launch scheduled in June 2015, we expect the OEM to grow even better.

Even with Zest & Bolt, Tata had to face a major de-growth of 19%. The Indian OEM is leaving no stone unturned to regain its lost ground and is planning aggressive product onslaught this year. Do expect the Kite sedan and hatchback and various refresh in its UV models. The Revetron petrol engine has still not got the acceptance it desired – market yet to accept Tata’s offerings for personal use.

Toyota’s growth was again led by Innova & Fortuner. The growth is also a resultant of the fact that Toyota’s production was stopped for some period in FY13-14. This financial year remains to be a challenge as there are no major launches planned.

Ford’s vision for India is questionable – Even with a star product in hand, the American automaker de-grew by 11% last FY! Their focus on exports and lack of support for Indian demand has costed dearly and has hit its reputation as well. Ford is planning to gain ground with Aspire – hope they plan it well and price it attractively.

Look at the Market Share of these OEM’s:

Market Share – Passenger Cars

Two Wheelers Segment:
One Crore Sixty Lakhs Four Thousand & Five Eighty One two wheelers sold in last FY! No wonder, India is world’s second largest two wheeler market. Do note that scooters contribute to 30% of overall 2-wheelers sales! (45,05,529 scooters). Hence Honda could make a strong presence in the Indian market with the blockbuster sales of its scooter offerings – Activa & Deo. FY 2014-15 also was significant in terms of sales of high-end bikes. The growth of high-end bike segment has made us realize the tremendous potential the segment has. Even in times of turmoil, high end bikes successfully grew double and even triple digits last year!

India’s Top 2-wheeler OEMs

It’ll not be wrong if we say that Hero Moto Corp is the Maruti of 2 wheelers! The Indian two wheeler manufacturer stays strong at 40.19% Market Share and grew at a respectable 5% last FY. Maestro & Pleasure did help the OEM to gain some lost ground in Scooter segment – however, Activa’s demand remains to be unshaken. It is still vouching strong on its most successful model – Splendor and has recently started aggressive campaign behind the brand promoting it as the world’s most fuel efficient bike(with i3s technology). It is also investing big time to develop future line of products and innovative technology.

Honda’s surge in growth has been a matter of envy for other 2 wheeler manufacturers and the Japanese OEM has took right steps in the right direction. The dealer expansion was extremely aggressive and has fueled the said growth. However, it is time that it sheds its dependency on scooterettes and expand strong product lineup in other categories as well.

TVS overtook Bajaj as India’s third biggest 2-wheeler OEM. Reason said – Wego & Jupiter laid the foundation for the growth. No presence of scooter models in Bajaj’s portfolio has hit it hard and TVS could manage to launch attractive options in the segment.

Bajaj however is planning to strengthen its higher capacity motorcycle offerings with mutiple launches in 150 cc category (say RS 200, AS 200, RS 150, AS 150, CS 400 & SS 400). It has also made strong plans to revive its Discover & CT brand as well.

Mahindra 2 wheelers had the worst performance in previous FY – Centuro did show some promise initially, but later was a dud due to product issues. Also the plan to leverage scooter demand through Gusto, but it couldn’t perform as well.

Piaggio’s USP as a high-end & fashionable scooter lost steam and the OEM had to suffer a de-growth of 12%. The brand requires some novelty and intelligent brand building to bounce back.

Royal Enfield, Harley Davidson & Triumph proved India’s mettle as a strong market for high end bikes and they could cash on the demand for premium bikes. Many of these manufacturers are planning manufacturing base in India to reduce the import duty and even start export from here. Royal Enfield volumes is just unbelievable – It is selling in almost equal numbers to Suzuki in India! With better production capability, RE is bound to increase its volumes exponentially in coming days.

Let’s look at the Market Share of these OEM’s:

Market Share – Two Wheelers

FY 2015-16 will see a lot of push for ‘Make in India’ and can witness a lot of players setting their manufacturing base here. Also the dynamics of the industry will change based on the acceptance of new line of products and categories. Do expect the industry to perform slowly – and as said in the beginning, only the best will survive.

* Sale – refers to the offtake data (billing from OEM to authorized dealer)

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