Monthly Sales Update Institutional Equities Automobile Sales-August 2018 4 September 2018 Mixed Performance; Commercial Vehicles Outperform Automobile sales in August 2018 showed a mixed performance with commercial vehicle OEMs reporting strong double-digit YoY volume growth and two-wheeler/car OEMs posting a mixed trend. Tractor sales, which have been growing in double digits, posted single-digit growth. Kerala floods impacted retail sales and despatches of OEMs, with the despatches of Maruti Suzuki India and Eicher Motors - which have a higher share of sales in Kerala - being impacted the most. Most passenger vehicle players and two-wheeler OEMs reported single-digit growth in sales. In twowheeler segment, Bajaj Auto reported strong growth with all-time high sales and a growth rate of 30% Other positives were strong medium and heavy commercial vehicle (MHCV) sales in case of all OEMs. As we enter the festive season, we expect the despatches of two-wheeler and car OEMs to improve in the coming months. In two-wheeler space, most players reported single-digit YoY growth in sales with market leader Hero MotoCorp reporting 1% YoY growth. Other two-wheeler OEMs like TVS Motor Company and Eicher Motors reported single-digit YoY volume growth of 8%/2%, respectively. Bajaj Auto and Suzuki Motorcycles India reported strong double-digit volume growth of 30%/31% YoY, respectively. Bajaj Auto s overall sales grew on the back of strong performance in both motorcycle and three-wheeler segments, with motorcycle segment growing 28% YoY and three-wheeler segment growing 45% In case of TVS Motor Company, motorcycles and scooters reported double-digit YoY growth while moped sales fell in double digits by 14%. TVS Motor Company s three-wheeler sales also grew by a robust 56% YoY because of strong exports. In passenger vehicle segment, market leader Maruti Suzuki India surprised with lower-than-expected sales, reporting a 3% YoY decline, being impacted by Kerala floods and heavy rainfall in a few other states in India. Other car-makers like Hyundai and Ford reported single-digit YoY growth of 3% each while Honda Cars India posted 2% YoY drop in sales. Tata Motors and Toyota Motors reported double-digit YoY growth in sales. M&M reported 15% YoY growth in automotive segment sales, with passenger car segment growing 2% YoY and commercial vehicle as well as pick-up vehicle sales rising by a strong 25% In commercial vehicle segment, sales continued their growth momentum with all companies posting strong double-digit YoY growth. MHCV sales surprised positively with Tata Motors and Ashok Leyland posting strong 27%/24% YoY growth in sales, respectively. LCV segment sales were also strong with Tata Motors and Ashok Leyland reporting robust 27%/38% YoY growth in sales, respectively. Other CV players like Volvo Eicher Commercial Vehicles (VECV) and SML Isuzu reported sales growth of 33%/38%, respectively. In tractor segment, the sales momentum moderated with both M&M and Escorts reporting single-digit YoY growth of 7%/5% YoY, respectively. Going forward, as we enter the seasonally strong sales season for two-wheeler and car sales with companies building in inventory ahead of the festive season, we believe the absolute volume will be higher compared to August 2018 and expect improvement in the overall growth rate for cars and twowheeler OEMs, Gaurant Dadwal Research Analyst gaurant.dadwal@nirmalbang.com +91-22-6273 8145 Vivek Sarin Research Associate vivek.sarin@nirmalbang.com +91-22-6273 8176 Exhibit 1: Automobile sales snapshot Company (units) Aug-2018 Aug-2017 YoY (%) Bajaj Auto 437,092 335,031 30.5 Hero MotoCorp 685,047 678,797 0.9 TVS Motor Company 343,217 317,563 8.1 Royal Enfield 69,377 67,977 2.1 Suzuki Motorcycles India* 62,446 47,745 30.8 Maruti Suzuki India 158,189 163,701 (3.4) Hyundai Motors 61,912 59,905 3.4 Ford India 8,042 7,777 3.4 Honda Cars India* 17,020 17,365 (2.0) Toyota Kirloskar India 14,581 13,081 11.5 M&M - Automobiles 48,324 42,116 14.7 M&M - Tractors 17,785 16,641 6.9 Tata Motors 63,385 48,988 29.4 Ashok Leyland 17,386 13,637 27.5 VE Commercial Vehicles 6,069 4,571 32.8 SML Isuzu 744 541 37.5 Atul Auto 4,430 4,023 10.1 Escorts 4,812 4,587 4.9 *Domestic volume; Source: Respective companies Please refer to the disclaimer towards the end of the document.
Domestic sales grew 27% 29% YoY, driven by by strong strong two-wheeler and three-wheeler sales. Domestic motorcycle sales continue growth to rebounds grow in double to 24% digits at 27% Commercial vehicles sales continued to to do do well, well, up 45% up 83% Exports were of up three-wheelers 35% were up sharply by 85% Sales grew just 1% YoY, but the company Overall expects two-wheeler double-digit sales growth were in the higher forth than coming estimate, festive season up 24% YoY, with motorcycle/scooter sales posting 32%/10% YoY growth, respectively. Three-wheeler sales were up by 115% Overall two-wheeler sales were up 7% Exports YoY, with post motorcycle/scooter double-digit growth sales -YoY posting growth 18%/11% of YoY 54% growth, backed respectively. by a 46% rise in two-wheeler exports. Three-wheeler sales were up 56% Exports post double-digit YoY growth of 45% driven by three-wheeler sales. Overall sales grew 14% YoY, driven by double-digit demand for compact vehicles. Ciaz car sales witness a decline of 27% Utility vehicle sales post flat 1% YoY growth. Overall sales fell 3% YoY because of floods in Kerala and heavy rainfall in other states Export sales growth rebounds to 19% Ciaz car sales witness a sharp sequential improvement after its launch last month. CIAZ sales grew 8% YoY Utility vehicle sales decline 16% Export sales decline 10% Exhibit 2: Bajaj Auto s sales Motorcycles 362,923 283,861 27.9 1,725,567 1,324,757 30.3 Commercial vehicles 74,169 51,170 44.9 338,509 206,435 64.0 Total 437,092 335,031 30.5 2,064,076 1,531,192 34.8 Domestic 255,631 200,659 27.4 1,181,807 866,065 36.5 Exports 181,461 134,372 35.0 882,269 665,127 32.6 Exhibit 3: Hero MotoCorp s sales Motorcycles/scooters 685,047 678,797 0.9 3,469,858 3,151,441 10.1 Exhibit 4: TVS Motor Company s sales Motorcycles 131,743 111,927 17.7 640,417 551,404 16.1 Scooters 126,676 114,354 10.8 533,559 464,304 14.9 Mopeds 71,657 82,865 (13.5) 356,710 341,845 4.3 Two-wheelers 330,076 309,146 6.8 1,530,686 1,357,553 12.8 Three-wheelers 13,141 8,417 56.1 61,984 33,289 86.2 Total 343,217 317,563 8.1 1,592,670 1,390,842 14.5 Exhibit 5: Maruti Suzuki India s sales Mini- Alto, Wagon R 35,895 35,428 1.3 178,644 181,248 (1.4) Compact-Swift, Ignis, Baleno, Celerio, Dzire 71,364 74,012 (3.6) 378,404 292,442 29.4 Mid-size - Ciaz 7,002 6,457 8.4 17,769 28,532 (37.7) Passenger cars 114,261 115,897 (1.4) 574,817 502,222 14.5 UV- S-Cross, Ertiga, Brezza 17,971 21,442 (16.2) 108,230 104,348 3.7 Vans - Omni, Eeco 13,663 13,931 (1.9) 74,242 65,384 13.5 Total domestic sales 145,895 151,270 (3.6) 757,289 671,954 12.7 LCV-Carry 1,805 730 147.3 8,401 2,478 239.0 Total exports 10,489 11,701 (10.4) 47,347 49,186 (3.7) Total sales 158,189 163,701 (3.4) 813,037 723,618 12.4 2 Automobile Sales August 2018
Exhibit 6: M&M Automobile division s sales Utility vehicle volume declines 2% Overall passenger vehicle volume registers 2% growth. Car and van sales register healthy doubledigit growth of 74% Three-wheeler sales volume growth remains strong at 35% Overall CV sales post 25% YoY growth, while exports rise 14% Tractor sales post moderate single-digit growth of 7% Domestic CV volume up 26% YoY on the back of various macro-economic factors like investment in improved industrial activity, infrastructure development and irrigationrelated projects. Volume is expected to remain strong. Domestic passenger vehicle sales grew 26% YoY on the back of continued strong demand for Tiago, Tigor, Nexon and Hexa models. MHCV sales post double-digit growth of 25% LCV sales continue to grow, registering 38% YoY growth. Passenger vehicles 19,758 19,325 2.2 100,318 96,240 4.2 Utility vehicles 17,892 18,255 (2.0) 91,845 90,489 1.5 Cars + vans 1,866 1,070 74.4 8,473 5,751 47.3 Commercial vehicles 20,326 16,303 24.7 96,550 77,778 24.1 LCV < 3.5T 18,584 15,346 21.1 87,752 72,116 21.7 LCV >3.5T 594 419 41.8 3,620 3,051 18.6 MHCVs 1,148 538 113.4 5,178 2,611 98.3 Three-wheelers 5,289 3,906 35.4 23,834 17,738 34.4 Domestic sales 45,373 39,534 14.8 220,702 191,756 15.1 Total exports 2,951 2,582 14.3 14,922 9,243 61.4 Total sales 48,324 42,116 14.7 235,624 200,999 17.2 Exhibit 7: M&M Tractor division s sales Domestic 16,375 15,356 6.6 135,309 114,738 17.9 Exports 1,410 1,285 9.7 5,939 5,853 1.5 Total tractor sales 17,785 16,641 6.9 141,248 120,591 17.1 Exhibit 8: Tata Motors sales PV-Domestic 39,859 31,566 26.3 181,590 124,709 45.6 CV-Domestic 18,048 14,340 25.9 92,792 64,131 44.7 Exports 5,478 3,082 77.7 16,926 12,973 30.5 Total 63,385 48,988 29.4 291,308 201,813 44.3 Exhibit 9: Ashok Leyland s sales MHCVs 13,158 10,570 24.5 54,801 39,476 38.8 LCVs 4,228 3,067 37.9 19,912 14,640 36.0 Total 17,386 13,637 27.5 74,713 54,116 38.1 3 Automobile Sales August 2018
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