India Automobiles: Model Watch - Hyundai, Honda & urban UV sales slacken in Dec - Religare

In 'Model Watch', we drill down to model-wise market share shifts in order to identify 2W/4W winners and laggards each month.

December is typically a lean month when select companies see inventory adjustment, and therefore may not reflect correct volume trends. In passenger cars, most of Hyundai brands reported sales declines (unlike MSIL), while in UVs, new launches clocked lower volumes. In bikes, Dream lost share in the executive segment (as Passion gained), while Pulsar lost share in the premium segment to Yamaha's FZ and TVS's Apache. Picks: 2Ws over 4Ws.

Volumes for Hyundai brands fall in Dec: Overall, car volumes declined 4.5% YoY/7%MoM in Dec. Partly affected by the inventory adjustment in a seasonally lean month, most Hyundai brands saw lower volumes: Grand i10 at 9.1k units vs. an avg. ~10.3k for the past 3 months, i20 3.5k units vs. 5.6k in Apr-Nov, Eon 5.4k units vs. 7.4k units, and Amaze 4.5k units vs. 6.6k units. MSIL's volumes however remained in line with the monthly sales trend (Swift/Dzire/ Alto/ WagonR at 16.8k/15.4k/ 23.8k/ 12.1k units) as the company gained market share.

New launch sales in UVs moderate: Net UV segment volumes declined by a sharp 10% YoY/9% MoM, with the MoM drop more reflective of the newer launches that lost market share in Dec: Duster 2.6k units (vs. an 4.2k avg. in Apr-Nov), Ecosport at 3.9k units vs. an avg. 5k since launch, and Terrano at 1.4k units vs. 3k in Oct-Nov. Ecosport seems to be losing sheen with volumes plunging from 6200 units in Sep to 3900 units in Dec, thus leading to market share gains for other incumbent brands (Bolero/Scorpio/ Innova: +180bps/ +35bps/+222bps MoM).

Passion, FZ, Apache gain share in bikes: Volumes for Honda's Dream spiraled down in Dec (to ~45k units) as its share in the 75-110cc segment dropped to 8.3% (vs. the Aug'13 peak of 12%) as Passion gained (while Discover maintained share MoM). In 110-125cc segment, Glamour gained (+270bps) at the expense of CB Shine, while Discover remained steady. In the premium segment, volumes for Pulsar products fell sharply MoM as Bajaj lost share to Yamaha's FZ and TVS's Apache.

Activa gains further share in scooters: Activa's share in scooters continued to grow - to over 50% in Dec (48%/38% in Nov'13/ Dec'12). The share of Hero brands - Maestro and Pleasure - also improved MoM by 170bps/70bps. Jupiter volumes continued to inch up since launch (now at 13.4k units with a 4.4% share - the 5th highest in the segment).

Can new launches in FY15 Auto Show bring respite: Auto volumes (especially 4Ws) have failed to show any signs of revival, with festive sales also remaining muted amid weak sentiments. The industry is now pinning its hopes on the new launches in the Auto expo. Honda's 4th generation City was the only major launch last month.

Source : Equity Bulls

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