Automobiles - Monthly Volume Round Up - Disappointment across Segments Continue - Karvy

The volume data of the Indian auto companies show a very disappointing YoY as well as MoM performance in Aug'13 with most of the players recording flat or decline in volumes on YoY & MoM basis during the month. Early monsoon with increasing fuel prices impacted rural demand this time. Moreover, mediocre expectation of upcoming festival impacted dealer off take to some extent. Overall inventory remained healthy. This time all the segments of industry, PV, CV and two wheeler continued their downward trend. However, Tractor industry reported marginal growth on a low base with some improvement in Eastern and Western belt.

After recording growth for years together, M&M's Auto volume declined for the second consecutive month with a fall of 17% YoY (up 2.2% MoM) to 37,897 units, however its Tractor volume inched up 7% YoY, but down 23% MoM to 14,158 units in Aug'13, Tata Motors' volume declined 31% YoY and 3.6% MoM to 49,611 units. Maruti Suzuki's volumes rose sharply by 61.2% YoY and 4.8% MoM to 87,323 vehicles in Aug'13, as Company's volume suffered due to labour unrest during Aug'12. Ashok Leyland's total volume decreased 24% YoY and 18% MoM to 7,139 units in the month. In two-wheeler space, TVS Motor recorded volume of 155,532 units, flat YoY and up 1.2% MoM in Aug'13. Bajaj Auto's volume declined 9.5% YoY (up 11% MoM) to 312,188 units, while Hero MotoCorp's total volume grew 3.6% YoY (down 5.7% MoM) to 459,996 units in Aug'13.

Two-wheeler Segment

Bajaj Auto: Bajaj Auto (BJAUT.IN/BAJA.BO) sold 312,188 units in Aug'13, down 9.5% YoY (up 11% MoM), due to fall in its domestic volume to the tune of 21.2% YoY and 1.9% to 168,028 units. Company's performance was also impacted due to subdued three wheeler exports to Egypt, which has been suffering from balance of payment issue since past six months. Company's export volume reported a growth of 9.6% YoY and 31% MoM to 144,160 units in the month. The performance of three wheelers was disappointed with fall of 17% YoY to 33,605 units, mainly due to plunge in exports volume. Its total motorcycle volumes stood at 278,583 units in Aug'13, down 8.5% YoY (up 13% MoM).

TVS Motor: TVS Motor (TVSL.IN/TVSM.BO) clocked total volumes of 155,532 units in Aug'13, flat YoY and increased 1% MoM. There was a fall in the Company's two wheeler volumes, while its three wheeler sales grew 80% YoY to 7,063 units in the month. The Company's two wheeler volume declined 1.5% YoY to 148,469 units in Aug'13.

Four-wheeler Segment

Tata Motors: Tata Motors (TTMT.IN/TAMO.BO) sold 49,611 units in Aug'13, down 31% YoY & 3.6% MoM. Its volume in M&HCVs space plummeted 44% YoY and 15.5% MoM to 8,249 units in Aug'13. Its PC sales plummeted 51% YoY (up 2.5% MoM) to 8,761 units in Aug'13. The LCV space was also subdued, as Tata Motors' LCV volumes declined 18.2% YoY to 24,904 units, after recording double digit growth for months together. The Company's exports rose 12% YoY and 14% MoM to 4,894 units in Aug'13.

Mahindra & Mahindra (M&M): M&M's (MM.IN/MAHM.BO) combined volume (Auto+Tractor) was at 52,055 units, down 12% YoY and 6% MoM. It sold 35,159 units in the domestic automotive segment in Aug'13, down by 18% YoY and 2% MoM. Its key volume growth driving PV segment comprises of UV and PC fell 27.5% YoY (up 2% MoM), while its LCV segment fell 4% YoY, but flat MoM to 13,718 units in Aug'13. Company's exports plummeted 9% YoY to 2,738 units in the month. Company's Tractor volumes rose by just 7% YoY, but fell 23% MoM to 14,158 units in the month with an improvement in Eastern and Western regions.

Maruti Suzuki: Maruti Suzuki (MSIL.IN/MRIT.BO) delivered decent performance in Aug'13, with its monthly vehicle sales standing at 87,323 units, up 61% YoY, due to low base of last year on account of labour unrest at its Manesar plant. There was hardly any production at its Manesar during Aug'12. Company's UV & MPV segment witnessed sharp fall on account of intensifying competition (Honda, Renault and Ford with new launches). The Company's Mini segment (M800, Alto, Wagon R, A-Star) rose 45% YoY to 32,019 units, while its most promising Super Compact segment rose 345% YoY (down 10% MoM) to 13,723 units in Aug'13. The Company's compact segment (Swift, Estilo & Ritz) rose 187% YoY and 25% MoM to 17,409 units.

Ashok Leyland: ALL sold 7,139 units in Aug'13, down 24% YoY and 18% MoM. Company cut the production sharply at its South plants in the month of July and Aug '13. The Company's LCV segment - "DOST" recorded volume of 2,200 vehicles in the month, decline of 22% YoY and 11% MoM. Excluding DOST, the Company's volume declined 25% YoY and 21% MoM to 4,939 units in Aug'13.

Eicher Motors: Eicher Motors (EIM.IN/EICH.BO) sold 3,207 units in Aug'13, down 18% YoY (up 2% MoM). In the domestic market, the Company's volumes declined 26% YoY and 5% MoM to 2,757 units.

Source : Equity Bulls

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