Automobile Sales-September 2012 - Eastern Financiers

Sales for the September month continued to be murky amid hike in fuel price, escalated cost of funds and dented sentiment of the Indian economy. Moreover, higher sales in the September month of the previous year aided by the onset of the festive season that falls in the month of November this year may be attributed for the bleak performance of the sector.

Bajaj Auto persisted to stage murky performance for yet another month marking de-growth of 13.77% which may primarily be attributed to the festive season this year being a month later than it was last year. Even the sagging economic scenario for the sector that is lingering amid sluggish demand displayed a dented performance during September 2012. Bajaj Auto reported sales of 360152 units in September 2012 against sales of 417686 units in the same month last fiscal. The company witnessed de-growth of sales across all the segments.

India's largest car maker, Maruti Suzuki India that was cuffed by almost a month long lock-out at its Manesar plant during August that resulted in sharp slip in sales to the tune of 40.76%-- recuperated in the following month marking growth of 9.84% which shall be attributed to the resumption of operations at its Manesar plant around mid of August. The Manesar plant that manufactures its largest-selling cars such as Swift and Dzire that slithered massively last month, reported sales growth of 24.26% for the super compact segment which sells Dzire, and the Swift, Ritz & Estilo that comprises the Compact division witnessed de-growth of 9.68% after prior months fall of 62.23%. The company retrieved sales growth almost across all its segments on restart of the Manesar plant. The company reported total sales of 93988 units in September 2012 against 85988 units in the same month last fiscal. On a monthly basis the company witnessed surge in sales of 73.56% with 54154 units being sold in August 2012.

Hero MotoCorp, the company that marked de- growth during the preceding months of July and August 2012 amid challenging environment where erratic monsoon rains, rising petrol prices and high interest rates affected retail sales in the rural and urban areas-aggravated during the month of September marking slowdown in sales, with sales of below 5 lakh units at 404787 units against 549625 units being sold in September last fiscal, observing de-growth of 26.35%. The company however clocked sales of five lakh plus units for eleven consecutive months till June 2012 before slipping below that level since July 2012.

India's second largest commercial vehicle maker Ashok Leyland reported 20.67% year-on-year rise in September sales at 10623 units, as continued strong demand for its light truck Dost helped cushion the bumpy ride of heavy trucks. The Hinduja group company sold 3027 units of the Dost SCV (small commercial vehicle), which was launched in September last year. Excluding the Dost, Ashok Leyland's CV sales declined 11.75% to 7596 units against last September that sold 8607 units.

Clocking an all time high monthly auto sales of 48342 units during the month of September 2012 against 44137 units sold in September last year-India's leading sports utility vehicle manufacturer, Mahindra & Mahindra witnessed growth of 9.53% on a yearly basis. The half-yearly consolidated auto sales numbers for the April- September period of FY13 stood at 267266 units, up by 19.61% over the corresponding period of the last financial year. However, the farm equipment sector of the company continued to clock de-growth of 18.60% marking sales of 20085 units as against 24673 units being sold in September last year. The overall growth of the company, including the farm equipment sector slightly inched lower by 0.56% with sales of 68427 units in September 2012 equated to 68810 units sold in September 2011.

Sales for India's largest commercial vehicle manufacturer, Tata Motors slipped during the month of September 2012 by 3.82% after marking growth of 12% in the preceding month led by de-growth almost across all its segments, except for the Nano that persisted to outperform the rest of section's of the company. Tata Nano that surged by over five times in the preceding month, clambered 87.02% this month with 5491 units being sold against 2936 units in September last fiscal. Total sales of the company parked at 75773 units against 78783 units being sold in September last year. Compared to the preceding month of August 2012, in which it sold 71826 units, sales edged up by 5.5%.

Except for the three wheeler segment, all the segments of TVS Motors Company persisted to report murky set of performance for the month of September with the overall sales marking de-growth of 22.46% followed by prior months down tick to the tune of 20.65%, 15.11% and 7.54% during August, July and June respectively. The company witnessed dismal sales of 170097 units this September against sales of 219369 units in September 2011. However, sales when compared to the preceding month of August 2012, augmented 9.99% with 154647 units being sold during the month.

Stance

Weak consumer sentiment led by high inflation, escalated cost of funds and trek in fuel prices, coupled with delay in festive season this year by a month, translated in bleak set of numerals for various segments of the auto sector during the month of September. However, with festive season in the offing, auto companies are anticipated to report improved performance in the forthcoming months of festivity.

Source : Equity Bulls

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