Two-wheelers for auto industry growth credits by RK Global

Last month Indian automobile industry saw a brief revival, after dampened market sentiment for four to five months. The two-wheeler segment registered double-digit sales growth amid high interest rates and soaring fuel prices. The rising sales of two-wheelers during this period is one of the foremost reasons of the brief positive trend witnessed by the auto industry in India, as per the assessment by RK Global. Two-wheeler segment thrived due to the positive consumer sentiment and heavy discounts offered by OEMs and dealers to ascertain sales momentum. Tata Motors, Hero MotoCorp and Ashok Leyland were the beneficiaries of the appraised sales, reporting figures beyond expectations.

 Indian automotive industry accounted sales of 1.2 million vehicles across various auto segments during November 2011. In a sales growth comparison amongst passenger car segment, commercial vehicle segment and two-wheeler segment, the two-wheeler segment emerges as a winner. Domestic passenger car sales was raised by 17 per cent growth (Y-o-Y basis), accounting sales of 2.1 lac units in November 2011 in comparison to 1.8 lac units sold same month last year. Whereas looking at the commercial vehicle (CV) segment experienced 21.6 per cent growth (10.5% M-o-M) basis. The sales growth of motorcycle was 28 per cent (Y-o-Y basis) during the month, accounting sales of 12 lac units.

Moreover, BSE Auto Index never showed positive trend, with M-o-M return of -11 per cent. Although, the demand in the 2-wheeler segment remained positive. The blooming two wheeler segment has registered commendable sales growth for the third consecutive month, November 2011.

Hero MotoCorp (HMC), the market leader in the two-wheeler segment, is consistently maintaining five lac-plus unit sales. Automaker's sales volume grew by 10.1 per cent (Y-o-Y basis), around 41.5 lac units. TVS Motors grew by 12 per cent, selling 15 lac units as against 13.4 lac units during (April-November). Bajaj Auto also accounted healthy sales figures, selling 3.7 lac units, a 25.1 per cent growth (Y-o-Y basis).

At the same time, four-wheeler segment slumped miserably with very few passenger car manufacturers reaching the level of break-even. Automakers in this segment further faced challenges on the interest rate front. In the month of November, sales of passenger cars was 18 per cent (Y-o-Y basis), accounting for 2.1 lac units.

Leading carmakers of India, Maruti Suzuki India Limited (MSIL), witnessed total sales increase of 65.1 per cent growth (M-o-M basis). A1 and A3 segment cars sales of the automaker grew by 108 per cent and 104 per cent (M-o-M basis), selling 10,403 and 38,921 units in November. Tata Motors, with sales growth of 13 per cent growth (M-o-M basis), was the other automaker with the positive trend in the passenger car segment. Besides, commercial vehicle segment maintained its growing trend during November month.

If the trend remains positive and the two-wheeler growth is replicated in the four-wheeler segment as well; the auto industry will have reason to celebrate completely.