The year 2018 took off with a high note on the back of Auto Expo 2018 excitement and new launches, but eventually fade away because of poor festive season sales and weak buying sentiment due to high fuel and insurance cost.
The overall trend in passenger vehicle sales was healthy during the first half of the calendar year on the back of new launches, low base, and a good monsoon. The first half of the calendar year witnessed important launches such as Maruti Suzuki Swift, Honda Amaze and Hyundai i20 facelift which has a larger contribution in overall sales of the respective OEMs.
Top 4 carmakers Maruti, Hyundai, M&M, and Tata accounted for over 82 percent of the Indian PV market.–
Rajan Wadhera, President, SIAM said, “The overall year was challenging as the festive season sales did not happen as they were expected because of high fuel prices, non-availability of credit and overall sentiment which did not pull customers to the showroom.”
Passenger vehicle sales recorded single digit growth of 5.32 per cent for passenger vehicles at 33,93,705 units when compared to 32,22,220 units in the calendar year 2017.
The sales started to weaken after Kerala Flood which is the largest market for passenger vehicles followed by Maharashtra. This is was further dampened by high insurance cost, liquidity crunch, and increasing fuel prices.
In the period between June and October, the price of petrol has increased by 14% and that of diesel 17%, according to the Petroleum Planning & Analysis Cell.
This further-led to weak festive season sales which ended early November with Diwali. During the 42-day long festive period, the retail sales of passenger vehicle were down by 14 percent, a report by the Federation of Automobile Dealers Association (FADA). The festive season being crucial for automakers as about 30 percent of annual car sales happen during this period.
“Lowest quarterly performance across all segments in the auto sector and lowest monthly sales yet in FY19. However, the year to date numbers for FY 19 has shown a growth of 9.6% and calendar year 2018 has ended with a 13 per cent growth in the face of growth in 2W and CV segment and the performance of PV in the first half or first two quarters. Year-end discounts have helped show some recovery despite an overall de-growth in December 2018. A little bit of easing of funding and favorable fuel price levels can improve sentiments in the first quarter of 2019 or Q4 of FY 2019.” said Sridhar V, Partner, Grant Thornton India LLP
But, the market sentiment seems to affect the few carmakers as seven out of 16 carmakers posted positive growth. Out of which top four carmakers mainly Maruti Suzuki, Hyundai India, Mahindra & Mahindra, and Tata Motors accounted for over 82 percent of the Indian passenger vehicle market.
|1||Maruti Suzuki India||1731450||16,02,522||8.05|
|2||Hyundai Motor India||550002||5,27,319||4.30|
|3||Mahindra & Mahindra||249301||2,42,386||2.85|
|5||Honda Cars India||174859||1,78,755||-2.18|
|9||Nissan Motor India||41586||53,390||-22.11|
|12||Skoda Auto India||16692||17,438||-4.28|
|Others = Isuzu, Force and Hindustan Motors|
Among all the largest gainer was Tata Motor which posted 24.13 percent growth at 2,37,217 units in the calendar year 2018 recording a market share of 7 per cent from earlier 5.9 percent in 2017. Riding on the success of Nexon and Tiago.
While the largest passenger vehicle manufacturer Maruti Suzuki recorded 8.05 percent at 1731450 units recording 51 percent market share in the calendar year 2018. Similarly, Ford and Toyota witnessed growths of 10.91% and 8.54%, respectively.
However, the South Korean carmaker Hyundai India which launched its much-awaited hatchback Santro witnessed a slow growth of 4.30 percent at 550002 units in 2018. It also saw a decline of 0.2 percent in market share to 16.2 per cent.
On another hand Japanese carmaker Honda Cars India which started a high note on the robust sales of Amaze saw a decline of 2.18 percent. While the luxury car market consisting of Mercedes Benz, BMW, Audi, JLR and Volvo stood at 40340 units, a growth of 3.4 per cent.
Mercedes continued its dominance with 38.5 per cent market share followed by BMW which had 27.5 per cent in market share in 2018. Mercedes witness a minor decline of about one per cent in the market share while BMW gained market share by 2 per cent in the mentioned.
The weak buying sentiment was even reflected on the high-end of the spectrum – the luxury cars. The overall luxury car market saw a decline of 3.30 percent at 37702 when compared to 38989 in 2017.
Two-wheeler Maintain High Growth
Amidst low consumer sentiment throughout the industry, two-wheeler segment posted a double-digit growth in the year 2018. Two-wheeler domestic sales grew by 12.8 per cent in 2018 at 21645169 units compared to 19182688 units in the previous year.
The growth comes after overcoming the various hurdles such as Kerala floods in August and IRDA’s orders to increase insurance premium of two-wheeler to five years at the time of buying.
Increased insurance premium put a lot of burden on buyers which led to about 10-15% drop in the retail of two-wheeler sales. However, the two wheeler segment recorded a growth of 12.83 per cent at 21,645,160 units last year. The domestic sales stood at 19,182,574 units in the year 2017.
India’s largest two-wheeler manufacturer, Hero MotoCorp maintained its pole position last year at 7,824,067 units with an increase of 11.4 per cent as compared to 7,023,363 units in the preceding year.
|Rank||OEMs||CY 2018||CY2017||% Growth|
|2||Honda Motorcycle & Scooter India||5884911||5456364||7.85%|
|5||Royal Enfield (Unit of Eicher )||837669||752880||11%|
|6||India Yamaha Motor||796234||786787||1%|
|7||Suzuki Motorcycle India||627991||464551||35.18%|
|9||Mahindra Two Wheelers||5197||18404||-71%|
|10||H-D Motor India||3148||3339||-6%|
|11||India Kawasaki Motors||2666||1470||81%|
|12||UM Lohia Two Wheelers||2628||5753||-54%|
Even after selling the highest volume, there was a marginal dip in the market share of Hero MotoCorp from 36.7 per cent a year ago to 36.15 per cent in 2018.
Similarly, second largest two-wheeler maker Honda Motorcycle & Scooter India (HMSI) saw a marginal dip of 1 per cent in market share over last year at 36.15 per cent.
Increased insurance premium put a lot of burden on buyers which led to about 10-15% drop in the retail of two-wheeler sales.–
Domestic sales of HMSI increased 7.85 per cent to 5,884,911 units in the period under review.
TVS remained at third with 3,151,097 units in CY18 and posted a growth of 16 per cent as compared to 2,714,662 units in CY17. There has been no significant increase in its market share.
In the two-wheeler market, Bajaj Auto was the only manufacturer to enhance its market share to 11.23 per cent in 2018 from 9.8 per cent in the previous year. The company also recorded a strong double digit growth of around 28.5 per cent to 2,428,813 units sold last year. The year before it, domestic sales for Bajaj Auto was recorded at 1,890,529 units.
Two wheeler market share
Royal Enfield also witnessed an increase of 11 per cent in domestic sales at 837,669 units in 2018 but failed to increase its market share.
India Yamaha Motors was close behind at 796,234 units which grew marginally at 1 per cent whereas Suzuki Motorcycles sold 627,991 units in 2018, an uptick of 35.18 per cent.
While majority of two-wheeler makers saw a marginal increase, Mahindra Two-wheelers, UM Lohia Two-wheelers and Harley Davidson Motor Company saw a major decline in their volumes. Harley Davidson Motor Company saw a 6 per cent dip at 3,148 units.
Mahindra Two-wheelers matched it with sales of 5,197 declining 71 percent followed by UM Lohia Two-wheelers, which is still a fringe player and sold 2,628 units with a decline of 54 per cent after selling 5,753 units in the year 2017.
In first quarter, growth in motorcycles was primarily helped by the rural economy, driving 22.7 percent growth in the below 110cc segment.
With the commencement of second quarter, volumes declined partly due to the high base in FY18, capacity constraints and inventory correction by OEMs. According to FADA, inventory in the two-wheeler segment post 2018 continue to remain at the higher side, that is 55-60 days.
CV in Fast Lane: Cross 1 million units
Despite contending with a combination of headwinds such as revised axel norms and NBFC crisis, the overall commercial vehicle sales showed a robust 27.28 per cent growth in domestic in the calendar year 2018. The commercial vehicle segment also crossed one million sales mark for the first time in 2018 at 1004900.
The commercial vehicle segment also crossed one million sales mark for the first time in 2018–
M&HCV witnessed a growth of 22.97 percent while LCVs grew by 30.16 per cent in the period under review.
However, slight 1-3 per cent contraction can be seen in the market share of major players in the recently concluded year due to some notable sales performance of small and new players specially in the SCV and LCV sub-segments.
For instance, Maruti Suzuki domestic sales increased over three-fold last year, registering a growth of whopping 223 per cent. By selling 20469 units in CY 18, the company manged to grab one percent of the market share in the over CV space.
Segment leader, Tata Motors sales volume grew to 448,629 units in CY 18 compared to 343091 units recording a growth of 30 percent expanding its market share to 44 per cent.
|1||Tata Motors Limited||4,48,629||3,43,091||30.76%|
|2||Mahindra & Mahindra Limited||2,47,842||2,02,541||22.37%|
|3||Ashok Leyland Limited||1,83,889||1,47,841||24.38%|
|4||Eicher Trucks and Buses||63,662||51,133||24.50%|
|5||Force Motors Limited||21,409||21,805||-1.80%|
|6||Maruti Suzuki India Limited||20,469||6,342||222.75%|
|7||SML Isuzu Limited||12,597||11,401||10.50%|
|8||Isuzu Motors India Pvt ltd||3,396||1,989||70.74%|
|9||Piaggio Vehicles Private Limited||1,822||2,335||-22%|
|10||Volvo Trucks India||1,185||1,066||11.16%|
On a similar note, Ashok Leyland improved its sales by 24.3 per cent at 183,889 units in 2018 but its market share marginally dropped to 18.3 per cent compared to 18.72 per cent market share a year ago.
In terms of market share, Tata Motors, Mahindra and Mahindra, and Ashok Leyland remained the top three contenders in CY 18 holding over 86 per cent of the market.
Commercial vehicle market share 2018 Commercial vehicle market share 2017
Although starting the year with impressive sales performance the segment specially, medium & heavy trucks saw sharp decline in the final months of 2018, majorly due to new axel norm.
What further crippled the demand was the liquidity crisis that CV market experienced after the breakdown of one of the prime financing company Infrastructure Leasing and Financial Services Ltd . As per Crisil prevalent NBFC liquidity crunch has raised CV lending rates 50-100 bps.
Three-wheeler in Top Gear
Three-wheeler segment grew at a fast pace, posting a double digit growth of 31 per cent in Calendar Year 2018 at cumulative domestic sales of 717,590 units. Three-wheeler sales stood at 548,026 units in 2017.
|3||Mahindra & Mahindra||64506||49685||29.83|
|7||Mahindra Electric Mobility||79||–||NA|
Bajaj Auto remained at top in this segment with 419,246 units sold in 2018, increasing its market share to 58.4 per cent from 54.2 per cent in 2017.
Piaggio Vehicles posted second highest number in three-wheeler segment with a market share of 23.3 per cent. However, the company’s market share declined 3 per cent post 2018.
At third position, Mahindra & Mahindra (M&M) sold 64,506 units last year; growing 29 per cent from year ago.