Mixed Performance due to Shifting of Festival Indian auto companies have delivered a mixed volume performance across segments barring CVs in Sept 18 owing to shift of festival this time and high base. Ongoing Pitru Paksha, which begun towards the end of the month and considered to be inauspicious, also impacted vehicle sales volume to some extent. However, strong industrial and infrastructure activities continued to boost CV demand. While the two-wheelers companies recorded a decent double-digit growth, PV segment recorded a marginal YoY decline in volume. Meanwhile, the tractor segment recorded double-digit decline on higher base. Looking ahead, we believe pre-festival inventory build-up would pick up from Oct 18 onwards. In two-wheeler segment, Bajaj Auto s sales grew by 17% YoY and 15% MoM to 5,02,009 units, Hero MotoCorp s sales grew by 7% YoY and 12% MoM to 7,69,138 units in the month, while TVS Motor s sales grew by 18% YoY and 24% MoM to 4,23,978 units. Amongst four-wheeler players, M&M s Auto volume rose by 3% YoY and 14% MoM to 55,022 units, Maruti Suzuki s volume declined by 0.5% YoY (+3% MoM) to 162,290 vehicles. While Ashok Leyland s volume grew by strong 26% YoY and 11.4% MoM to 19,373 units, Tata Motors volume grew by strong 21% YoY and 10% MoM to 69,848 units. In tractor segment, while M&M s tractor volume declined by 18% YoY (+111% MoM) to 37,581 units, Escorts volume increased by 3% YoY and 121% MoM to 10,617 units due to seasonality. Exhibit 1: Overall Volume Analysis Total Units Sales Sep 18 Sep 17 YoY YoY Bajaj Auto 502,009 428,752 17.1 437,092 14.9 2,566,085 1,959,944 30.9 Hero 769,138 720,739 6.7 685,047 12.3 4,238,996 3,876,492 9.4 MotoCorp TVS Motors 423,978 359,850 17.8 343,217 23.5 2,016,648 1,750,692 15.2 Maruti Suzuki 162,290 163,071 (0.5) 158,189 2.6 975,327 886,689 10.0 M&M Auto 55,022 53,663 2.5 48,324 13.9 290,646 254,755 14.1 Volume M&M Tractors 37,581 45,563 (17.5) 17,785 111.3 178,829 165,719 7.9 Tata Motor 69,848 57,852 20.7 63,757 9.6 367,006 262,747 39.7 Ashok Leyland 19,373 15,370 26.0 17,386 11.4 94,085 69,473 35.4 Eicher Motors 6,663 6,083 9.5 6,069 9.8 34,919 26,563 31.5 (CV) Escorts 10,617 10,353 2.5 4,812 120.6 45,533 37,919 20.1 Domestic Vol for Following Cos Hyundai 47,781 50,028 (4.5) 45,801 4.3 274,177 264,465 3.7 Toyota 12,512 12,335 1.4 14,100 (11.3) 79,527 67,961 17.0 Ford 8,239 8,769 (6.0) 8,042 2.4 49,038 45,472 7.8 Honda 14,820 18,257 (18.8) 17,020 (12.9) 94,419 91,269 3.5 HMSI 555,730 569,888 (2.5) 577,249 (3.7) 3,315,392 3,146,563 5.4 Research Analyst: Mitul Shah Contact: (022) 3303 4628 Email: mitul.shah@relianceada.com 1 1
Two-wheeler Segment Bajaj Auto: Bajaj Auto (BJAUT.IN/BAJA.BO) sold 5,02,009 units in Sept 18 (+17% YoY and +15% MoM) on the back of strong performance across domestic 2W and exports. The Company recorded all-time high monthly volume across segments in Sept 18. Its domestic sales grew by 11% YoY and 22% MoM to 3,11,503 units owing to promotional activities and incentives on motorcycles, while exports rose by 30% YoY and 5% MoM to 190,506 units owing to improvement in middle-east countries amid rising crude price. Recently new markets like Cambodia, Ghana and Iraq etc. are contributing to aid growth in export volume. Exhibit 2: Bajaj Auto Units Sep 18 Sep 17 YoY Motorcycles 430,939 369,678 16.6 362,923 18.7 2,156,506 1,694,435 27.3 Domestic 273,029 247,418 10.4 218,437 25.0 1,287,133 1,010,559 27.4 Exports 157,910 122,260 29.2 144,486 9.3 869,373 683,876 27.1 Three Wheelers 71,070 59,074 20.3 74,169 (4.2) 409,579 265,509 54.3 Domestic 38,474 34,361 12.0 37,194 3.4 206,177 137,285 50.2 Exports 32,596 24,713 31.9 36,975 (11.8) 203,402 128,224 58.6 Domestic Volume 311,503 281,779 10.5 255,631 21.9 1,493,310 1,147,844 30.1 Exports 190,506 146,973 29.6 181,461 5.0 1,072,775 812,100 32.1 Total Volume 502,009 428,752 17.1 437,092 14.9 2,566,085 1,959,944 30.9 Hero MotoCorp: Hero MotoCorp (HMCL.IN/HROM.BO) sold 7,69,138 units in Sep 18 (+7% YoY and +12% MoM). For the fifth time overall and third in current fiscal (), the Company has crossed the 7,00,000 sales mark in a month aided by improving rural sales and higher growth of motorcycles. In Sept 18, HMCL commenced nationwide sales of its new premium motorcycle i.e. Xtreme 200R. It YoY plans to launch 2 new 125CC scooters in the upcoming festive season to scale-up its market share in scooter segment. The Company announced average price hike of Rs900/vehicle effective from Oct 18 to pass on RM cost inflation.. Exhibit 3: Hero Motorcorp Units Sep 18 Sep 17 YoY Exhibit 4: TVS Motor Units Sep 18 Sep 17 YoY YoY Motorcycles 166,489 143,923 15.7 131,743 26.4 806,906 695,327 16.0 Scooters 142,562 121,601 17.2 126,676 12.5 676,121 585,905 15.4 Mopeds 101,645 85,330 19.1 71,657 41.8 458,355 427,175 7.3 Scooters/ Mopeds 244,207 206,931 18.0 198,333 23.1 1,134,476 1,013,080 12.0 Three Wheeler 13,282 8,996 47.6 13,141 1.1 75,266 42,285 78.0 Total Sales 423,978 359,850 17.8 343,217 23.5 2,016,648 1,750,692 15.2 Two Wheelers 769,138 720,739 6.7 685,047 12.3 4,238,996 3,876,492 9.4 TVS Motor: TVS Motor (TVSL.IN/TVSM.BO) sold 4,23,978 units in Sep 18 (+18% YoY and +24% MoM). Its 3W sales grew by a strong 48% YoY (+1% MoM) to 13,282 units, which cushioned overall sales volume. Its 2W volume grew by 17% YoY and 24% MoM to 410,696 units, while motorcycle sales rose by 16% YoY and 26% MoM to 1,66,489 units. Domestic 2W volume grew by 18% YoY and 31% MoM, while its two-wheeler exports rose by 13% YoY (-9% MoM) to 49,560 units. Surprisingly, its moped sales grew by strong 19% YoY and 42% MoM to 1,01,645 units, recording an all-time high monthly volumes. Its export volume rose by a healthy double-digit in Sept 18. YoY 2 2
Four-wheeler Segment Maruti Suzuki: Maruti Suzuki (MSIL.IN/MRIT.BO) delivered a disappointing performance in Sept 18 as well. With a marginal 0.5% YoY decline (+3% MoM), its monthly vehicle sales stood at 162,290 units. In domestic PV segment, its sales rose by 1% YoY and 4% MoM, while exports fell by 25% YoY and 17% MoM to 8,740 units. The Management cited slow pick-up and shifting of festivals as key reasons for subdued volume performance. Its UV volume grew by 9% YoY and 20% MoM on the back of strong sales of Brezza. UV sale was also impacted by phasing out of old Ertiga, as we expect the Company to launch new Ertiga in upcoming festive season. Its Van volume rose by 7% YoY and 7% MoM. Mini segment (Alto and Wagon R) sales fell by 9% YoY and 3% MoM to 34,971 units, while its volume in Compact segment (Swift, Celerio, Ignis, D zire, Baleno) rose by 2% YoY and 4% MoM to 74,011 units. MSIL s Brezza has a waiting period of ~4-6 weeks currently, while overall sales growth appears to be slowing down. Exhibit 5: Maruti Suzuki Volume Analysis Units Sep 18 Sep 17 YoY YoY A: Mini (Alto,Wagon-R) 34,971 38,479 (9.1) 35,895 (2.6) 213,615 219,727 (2.8) A: Compact (Swift, 74,011 72,804 1.7 71,364 3.7 452,415 365,246 23.9 Celerio, Ignis, Baleno, Dzire, Tour S) A: Mid-Size (CIAZ) 6,246 5,603 11.5 7,002 (10.8) 24,015 34,135 (29.6) Total A: Passenger Cars 115,228 116,886 (1.4) 114,261 0.8 690,045 619,108 11.5 B: Utility Vehicles (Gypsy, 21,639 19,900 8.7 17,971 20.4 129,869 124,248 4.5 Ertiga, S-Cross, Vitara Brezza) C: Vans (Omni, Eeco) 14,645 13,735 6.6 13,663 7.2 88,887 79,119 12.3 Domestic Passenger Vehicles 151,512 150,521 0.7 145,895 3.9 908,801 822,475 10.5 LCV (Super Carry) 2,038 879 131.9 1,805 12.9 10,439 3,357 211.0 Total Domestic Sales 153,550 151,400 1.4 147,700 4.0 919,240 825,832 11.3 Export 8,740 11,671 (25.1) 10,489 (16.7) 56,087 60,857 (7.8) Total Sales 162,290 163,071 (0.5) 158,189 2.6 975,327 886,689 10.0 Mahindra & Mahindra (M&M): With 7% YoY decline, M&M s (MM.IN/MAHM.BO) combined volume (Auto+Tractor) came in at 92,603 units (+40% MoM due to seasonality of tractor segment). It sold 51,268 units in domestic automotive segment, recording growth of 2% YoY and 13% MoM. Its key volume contributor i.e. PV segment comprising of UV, MPV and PCs fell by 16% YoY (+8.4% MoM) owing to higher competition. Its LCV segment grew by 19% YoY and 14% MoM to 21,853 units, while exports grew by 17% YoY to 3,754 units. Its Tractor sales delivered disappointing performance as it declined by 18% YoY (+111% MoM) to 37,581 units. While domestic volume fell be 18% YoY and exports volume grew by 4% YoY in Sept 18. Exhibit 6: M&M Auto Volume Analysis Units Sep 18 Sep 17 YoY YoY PCs 1,526 1,218 25.3 1,866 (18.2) 9,999 7,056 41.7 Passenger UVs 19,885 24,109 (17.5) 17,892 11.1 111,730 114,598 (2.5) 4-wheel pickups 21,223 17,803 19.2 18,584 14.2 108,975 89,919 21.2 LCVs 630 514 22.6 594 6.1 4,250 3,571 19.0 M&HCVs 1,064 884 20.4 1,148 (7.3) 6,242 3,495 78.6 Three Wheelers 6,940 5,928 17.1 5,289 31.2 30,774 23,666 30.0 Total Domestic Sales 51,268 50,456 1.6 45,373 13.0 271,970 242,305 12.2 Export 3,754 3,207 17.1 2,951 27.2 18,676 12,450 50.0 Total Sales 55,022 53,663 2.5 48,324 13.9 290,646 254,755 14.1 Exhibit 7: M&M Tractors Units Sep 18 Sep 17 YoY YoY Domestic 35,953 44,000 (18.3) 16,375 119.6 171,262 158,363 8.1 Exports 1,628 1,563 4.2 1,410 15.5 7,567 7,356 2.9 Total Tractors 37,581 45,563 (17.5) 17,785 111.3 178,829 165,719 7.9 3 3
Tata Motors: Tata Motors (TTMT.IN/TAMO.BO) sold 69,848 units in Sept 18 (+21% YoY and +10% MoM). Its CV volume grew by 26% YoY and 16% MoM to 46,169 units, while PV sales grew by 7% YoY and flat MoM to 18,429 units led by success of Nexon. Its exports grew 35% YoY to 5,250 units in the month. Exhibit 8: Tata Motor Volume Analysis Units Sep 18 Sep 17 YoY YoY PVs 18,429 17,286 6.6 18,420 0.0 106,865 81,417 31.3 CVs 46,169 36,679 25.9 39,859 15.8 232,487 161,388 44.1 Domestic Sales 64,598 53,965 19.7 58,279 10.8 339,352 242,805 39.8 Export Sales 5,250 3,887 35.1 5,478 (4.2) 27,654 19,942 38.7 Total 69,848 57,852 20.7 63,757 9.6 367,006 262,747 39.7 Ashok Leyland: ALL sold 19,373 units in Sept 18 (+26% YoY and +11% MoM). Its LCV segment recorded volume of 5,141 vehicles, recording a growth of 44% YoY and 22% MoM, while M&HCV volume rose by 21% YoY and 8% MoM to 14,232 units. Looking ahead, the Management has indicated strong demand owing to higher infra spend and increased construction activities, which would aid M&HCV volume. Within M&HCV segment, tipper segment witnesses a strong growth. Eicher Motor: Eicher sold 6,663 units in Sep 18, up 10% YoY and 10% MoM. In domestic market, it sold 602 buses (-2% YoY and -6% MoM) and 5,158 trucks (+11% YoY and +19% MoM). Its exports grew by 6% YoY to 903 units. Exhibit 10: Eicher Motors Units Sep 18 Sep 17 YoY YoY Truck 5,158 4,621 11.6 4,324 19.3 24,209 17,174 41.0 Bus 602 612 (1.6) 640 (5.9) 5,969 5,646 5.7 Domestic Truck/Bus 5,760 5,233 10.1 4,964 16.0 30,178 22,820 32.2 Exports 903 850 6.2 1,105 (18.3) 4,741 3,743 26.7 Total Volume 6,663 6,083 9.5 6,069 9.8 34,919 26,563 31.5 Tractor Segment Escorts: Escorts (ESC.IN/ESCO.BO) sold 10,617 units, grew 3% YoY and 121% MoM. Its domestic volume grew by 3% YoY and 122% MoM to 10,396 units, while exports fell by 6% YoY. Exhibit 9: Ashok Leyland Units Sep 18 Sep 17 YoY YoY M&HCV 14,232 11,804 20.6 13,158 8.2 69,032 51,267 34.7 SCV/LCV 5,141 3,566 44.2 4,228 21.6 25,053 18,206 37.6 Total Sales 19,373 15,370 26.0 17,386 11.4 94,085 69,473 35.4 Exhibit 11: Escorts Units Sep 18 Sep 17 YoY YoY Domestic 10,396 10,144 2.5 4,674 122.4 44,492 37,016 20.2 Exports 221 209 5.7 138 60.1 1,041 903 15.3 Total Tractors 10,617 10,353 2.5 4,812 120.6 45,533 37,919 20.1 4 4
Other Auto Players Exhibit 12: Domestic Sales performance of other Auto Players Units Sep 18 Sep 17 YoY YoY PVs Hyundai 47,781 50,028 (4.5) 45,801 4.3 274,177 264,465 3.7 Toyota 12,512 12,335 1.4 14,100 (11.3) 79,527 67,961 17.0 Ford 8,239 8,769 (6.0) 8,042 2.4 49,038 45,472 7.8 Honda 14,820 18,257 (18.8) 17,020 (12.9) 94,419 91,269 3.5 Two-wheelers HMSI 555,730 569,888 (2.5) 577,249 (3.7) 3,315,392 3,146,563 5.4 Suzuki 63,140 50,808 24.3 62,446 1.1 331,017 227,677 45.4 5 5
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