Long Term Trends in India's four wheeler Production, Sales, Exports

[vasudeva]

Apart from the monthly sales figure posted here, this link gives figures for long term production, domestic sales, and exports for India's four wheeler industry.

vasudeva - LONG TERM PRODUCTION DOMESTIC SALES EXPORTS

[diesel_head]

Awesome document. gives an in depth trend in this decade.

[GTO - Touring]

I hope I am not asking to be spoon-fed, Vasudeva, but you have posted some fantastic information on the busiest day of the week! Can I ask you to put in your inferences / observations from this data?

Thanks

[vasudeva]

Originally Posted by GTO - Touring

I hope I am not asking to be spoon-fed, Vasudeva, but you have posted some fantastic information on the busiest day of the week! Can I ask you to put in your inferences / observations from this data?

Thanks

So many inferences to be drawn from these stats that if I put something, someone would howl as to why I have missed something else. Still, some very quick observations:

1.Distinct slowdown in 2007-08 (FY2008).
2. Maruti’s share has remained the most consistent across 2003-08: 46-47%. Over the same period, Hyundai down marginally, and so is Tata.
3. Pt.2 needs to be combined with the fact that growth during last 5 years has been higher in bigger segment (cars and MUVs). That means +for Honda and Toyota; and growth limitation on Maruti, Hyundai, and Tata.
4.That still leaves a lot of room for these 3: the Indian market will still retain a small car one (with a gradual shift upwards). The small, compact, and Omni share of total domestic sales has remained at around 65% for last few years.
5. The bigger segment is growing fast but still very low % of total. That should change in the next decade.
6. Hyundai has dominated exports. That is a +for the country. On the other hand, no one has found success in exporting bigger cars. They may export to fellow LDCs (Bangladesh, etc) but not to competitive markets of US, Europe, and Japan. Could that change soon? Not soon, though people are trying. As of now, only M&M and Tata have some plans, but those involve a radical quality improvement, which will not happen tomorrow (liability laws have made them very cautious). Toyota and Honda have the products, but then they also have factories worldwide. Possibly India could be used as a regional hub. Suzuki exports small cars, and its big cars do not sell much anywhere.
7. High growth for One month or quarter or even a year do not make a successful company, as Fiat and GM have found it (have data prior to 2002 also). Even the 3-year growth can be misleading (when read in isolation). Refer only Skoda. It was anyway growing at a good rate but selling around 1000 prior to Fabia. Now it sells 1900-2000. That means a 100% growth. Similarly for Logan/M&M; Spark/GM.
8. Most important for survival (as any business would be aware) is profits. No profits and selling at a loss soon leads to extinction. The really good profitable years were till FY2007. From 2003-07, although steel, aluminium, plastics prices all increased; higher volumes enabled healthy growth in profits and returns. That has changed in 2007-08 with higher costs continuing, but volume growth slowing down. For comparison, I am posting the operating margin and return on networth for major companies which have publicly available financial results for FY2007 (first figure is margin and second is return):
Maruti: 13.5%, 25.4%; margins increasing FY2004-07
Tata: 10.5%, 30.9%; stable margins
HM: operating losses from 2003-04 onwards
Hyundai: 8.3%, 20.4%; declining margins from 2001-02 onwards, though margins have been stable during 2005-07.
Honda: 11.2%, 30.8%, stable margins
M&M: 8%, 33.3%; stable margins.