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Auto sales for FY10 at record high, but subdued start in April

Auto sales for FY10 at record high, but subdued start in April
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First Published: Thu, May 06 2010. 09 42 PM IST

Updated: Thu, May 06 2010. 09 42 PM IST
Auto sales touched a record high in FY10 on positive consumer sentiment and partially due to advanced buying at the dealers’ end in anticipation of price hike due to change in the emission norms from 1 April. However, the first month of FY11 began with sequential slippage in volumes, owing to increase in product prices and short supply of spare parts.
This was largely due to the sustained hike in commodity prices, change in emission norms and excise duty hike. Hence, most auto firms passed on the cost impact with the hike in prices. Volumes of most firms showed signs of tapering off growth for the month. Nonetheless, pick-up in economic activities is expected to keep demand strong, albeit more normalized across segments, considering demand may have peaked in the past few months prior to the expected price hikes after the excise duty hike and spurt in raw material prices. 
Tata Motors Ltd reported a robust 52.5% year-on-year (y-o-y) growth in total volumes, with the medium and heavy commercial vehicles segment leading the growth at 63.1% y-o-y, followed by the light commercial vehicle (LCV) segment growing at 28.4% y-o-y. Exports also boosted the company’s performance, reporting robust y-o-y growth of 148.8% partially on a low base. Passenger cars also recorded a healthy growth of 76.8% y-o-y with new launches by the company, such as Manza, clocking good volumes.
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Ashok Leyland Ltd reported a robust 271.4% y-o-y growth in total volumes, led by strong sales in the trucks segment, which rose 357.1% y-o-y primarily due to the low base effect and recovery in the domestic industrial production. Exports have also been recovering since the last few months.
Maruti Suzuki India Ltd recorded a good 29.7% y-o-y growth in sales to 93,058 units. April numbers include domestic sales of 80,034 units and export sales of 13,024 units. The management is positive about its new launch, Eeco, which lent a boost to its C segment volumes, which grew 37.9% y-o-y. The passenger car segment grew 24% y-o-y, while multi utility vehicle segment registered 21.3% y-o-y decline. 
Mahindra and Mahindra Ltd reported overall volumes of 42,197 vehicles led by 40.1% y-o-y growth in the tractor segment supplemented by 12.6% y-o-y growth in the automotive division. The automotive segment growth was led by the LCV and three-wheeler segments that recorded 32.7% and 97.7% y-o-y growth, respectively. However, on a high base, utility vehicle volume growth was muted at -2.4% y-o-y. The firm performed exceptionally well on the exports front, growing at around 121.2% y-o-y. In April, the company suffered a major component shortage in engine parts, dies and castings. This negatively affected the dispatches, which is expected to get to normal in May. 
Hero Honda Motors Ltd reported flat growth in the two-wheeler segment, registering 0.3% y-o-y growth to 371,652 units. Bajaj Auto Ltd led the pack with a striking 85.4% growth on the back of its key brands, Pulsar and Discover, performing well in the month. TVS Motor Co. Ltd clocked 27.9% y-o-y growth due to good growth registered by the scooter and moped segment. The recently launched TVS Jive (launched in Tamil Nadu) and the TVS Wega supported high volumes in the motorbike and scooter segments.
Graphic by Yogesh Kumar/Mint
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First Published: Thu, May 06 2010. 09 42 PM IST