August 2009 Indian Car Sales Figures & Analysis

[GTO]

This Analysis has been jointly prepared by GTO & Vasudeva. Many thanks to Vasudeva for his support.

Abbreviations used : MOM (Month on Month) and YOY (Year on Year).

The festive season has begun for car manufacturers; upcoming Diwali period alongwith economic recovery will only take the growth further. Domestic auto sales grew a stunning 22.4% (YOY) in August 2009 (29% yoy in 7/09). Passenger car sales (including utility vehicles) were up 152,100 units sold, a gain of 28,000 cars YOY. The hatchback segments continue to grow (40.8% & 33.7% respectively), partially at the expense of C segment sedans (down by 2%). Clearly, the slew of new premium hatchbacks is drawing customers by the droves. Does the market prefer a premium hatch to an entry level sedan? You bet. The executive & luxury segments have also grown (premium brands rejoice, big fish feeling condident), yet their actual numbers are too small (double digits) to have any impact overall. UV (driven by BPOs & tourist taxis) recovering (up 7%), indicating an IT/software/travel industry recovery.

[GTO]

Hatchbacks:

• We have a fresh entrant in the A1 segment : The iconic Tata Nano. Yes, while only 2,500 Nanos were delivered in August 2009, expect this number to increase 10+ fold once production stabilizes. You could have easily added another zero here if it weren't for Mamata Banerjee and all that West Bengal trouble. The Maruti 800 continues its downward spiral with a 26% YOY loss (2,734 cars sold).

• Selling nearly 10 hatchbacks clearly works wonders for Maruti, product overlap naysayers can take a walk. New launches such as the Ritz & A-star, alongwith existing best sellers like the Alto, WagonR and Swift has seen Maruti's A2 hatchback sales climb an astounding 39.3%! Those of you who have invested in Maruti shares must be used to hearing the cash register ring non-stop. Expect aggressive marketing activities & advertising to only increase in the coming season.

• Huge gains for Hyundai in compacts. The Korean giant trots along respectably with nearly 22,000 Santros, i10s & i20s moving off showroom floors. Over the past couple of months, we've gotten used to seeing consistent 20-something thousand numbers from Hyundai. Premium hatch i20 doing better than Hyundai initially expected. YOY sales are up 19.4%.

• 9,600 Indicas & Vistas found new homes in August. A YOU growth rate of 23.7% is commendable without doubt. However, August is the 3rd worst month for Tata in this year (April & July were at 8.5 units), Compare that to Maruti & Hyundai for whom August has been one of the best so far (second only to March), its clear that Tata has its work cut out. Respectable, but there is clearly more potential, especially for the excellent Vista. What is Tata going to do differently?

• Chevy saw its hatch sales climb by 14.3% in August, GM's bankruptcy be damned. As I have posted earlier, GM India's CEO did a fantastic job of managing the PR around the time of its parents troubles. 4,185 hatchbacks sold, a majority of which come from the competent & well-priced Spark. GM India will be satisfied with its current cash inflow.

• Rank no.5 amongst the hatchbacks? Its Fiat. The Punto seems to be settling around the 1,600 odd mark (Palio < 200 cars). Not bad for a brand that came back from nowhere, yet there is clearly a lot of work to be done in terms of taking care of those who spoke with their money (customers) and rebuilding that dented image. Bringing up Fiats lousy August 2008 performance is irrelevant to statistical comparisons.

• Big trouble for the Honda Jazz. Their own estimates were at about 2,000 sales monthly. Well, except for the month of launch (2,032 in June), the Jazz has only managed 50% of the company's original predictions, this only in the 3rd month of sale!! August sales are down to 1,029 cars sold. The market is not going to bite at an 8 lakh on-the-road price, not for a 1.2 liter hatch that doesn't come loaded with equipment, even if it wears the H badge. VALUE is the only thing that matters in the <10 lakhs segment. Honda doesn't have a history of cutting prices, it will be interesting to see how they manage to get the Jazz on track. More features for the same price perhaps? On the positive front, this episode will make the big brands get realistic with their price / profit expectations.

• Skoda managed about 560 Fabias in August, about the same as last year (down by 0.7%), yet an improvement over recent months where it was only doing 200 - 350 cars. Petrol Fabia @ 4.4 lakhs working? 500 hatchbacks is nothing to write home about, the biggest restriction to its success being Skoda's shoddy service, expensive ownership and the lousy 3 cylinder engines.

• The *invisible* act : Ford Fusion. 47 cars sold. I don't know why Ford even bothers with this "confusingly-positioned" car. Atleast tell us now Ford, is it a hatch, an SUV or a crossover?

Sedans:

• Nearly 8,000 Dzires (majority) and SX4s sold in August. YOY sales in the positive by 44%. The Dzire has got to be one heck of a profit generator, when you consider that its basically a best-selling hatch with a boot. And the Swift production cost is cheap by todays standards (volumes + 5 years of production).

• The second best selling sedan is the Indigo (CS included) with 2,656 units sold. All is not well though, YOY sales hit by a massive -40.4%. 6 mths now of double digit declines. The market is giving the cold shoulder to the Indigo, this was a sedan that once did a consistent 3,500 - 4,500 cars. You can bet that the Tata management is placing big bets on the upcoming Indigo Vista (based on the Indica Vista). You can bet on its competitive price, keeping Tatas keenness to bounce back in mind.

• The Hyundai Accent / Verna managed 2,537 sales (down 23% YOY), exactly one unit more than the Honda City @ 2,536 (down 8.2% YOY). The Verna & Accent have pretty much saturated, yet what is surprising is the Honda City's yoyo performance. In a recovering market, the August performance is 2nd worse of the year. Average Honda City sales from January to July are 3,900 cars. The upcoming new City with more features has the potential to take it back to a consistent 3,500 monthly tally.

• If you need proof that monthly specials help, just ask Ford. 2,388 Fiestas & Ikons moved, a YOY climb of 60%. We've gotten used to seeing a new "special edition" every month! Just don't ask about the profitability on those 5 lakh Fiestas though.

• Fiat sold 952 Linea's in August, a marginal improvement over the 850 - 900 level that it seems to have settled at.

• The Great Driving Challenge was a terrifically marketed event, yet it did NOTHING to the Cedia. Combined Ambassador, Lancer & Cedia sales are at a pretty embarassing 589. The Cedia is probably no more than a 100 of that. Even the politicians seem to be looking elsewhere, talk about us being spoilt for choice.

• Equally embarassed has got to be the low-cost-but-high-priced Logan. YOY sales down 68% to a measly 469 cars.

• Worst selling sedan : Unsurprisingly, the GM Aveo @ 389. The last 2 months have seen some increase, after a record breaking 28 months of decline. We hear that preparations for the Optra's last rites have begun (only 167 sold in August).

[GTO]

C+ segment:

• The Corolla Altis extends its domination in the 10 lakh sedan segment with 840 cars sold, That's its best performance so far this year. However, don't overlook the fact that it is down 39.7% YOY. Still, the best selling C+ sedan today, and this without a diesel! I am very excited to see if the Cruze - with its Captiva sourced diesel powerpack - can manage to turn the tables here.

• The Octavia & Laura combined sold a respectable 627 cars. 12 months of decline reversed. Good number, yet Skoda certainly isn't able to maximise the potential of its diesel trump card.

• Another new entry into our monthly analysis : The VW Jetta @ 335 cars sold! This number should be in the ballpark of what the Laura is managing alone. Great for a late entrant and one that has limited dealerships. Period. It is an opportunity for VW to play the after-sales tune, as an incentive for buyers to choose VW over Skoda. IMHO, they are making a mistake by ignoring the Jetta Petrol. The Altis shows that there is a market for 10 lakh petrol sedans.

• The Civic continues its downward spiral, a measly 231 cars moved off showroom floors, and down 61% YOY. Civic in its 26th straight month of decline, and will post 27th mth in 9/09. No doubt, some potential customers would have deferred their purchases by a month for the facelift Civic. Yet, the Civic hasn't impressed us with its market performance this year. Can the facelift do the trick? I dunno, as it really doesn't have any substantial advantage. Honda is going to have to rethink its strategy of sparsely equipping its cars which sell at a premium price. It cant work with the same attitude that it had in 2001. Competitive forces at work here.

D Segment:

• The outstanding Skoda Superb goes on to extend its lead in the D segment = 276 cars sold! Clearly, the value that this car offers alongwith its long feature list is making the market overlook Skoda's problems of aftersales, reliability and high cost of ownership.

• The Accord trundles along at 229 cars sold, its third best performance this year. What is surprising is that the Accord has sold nearly the same amount (difference of only 2 units) as the Civic.

• The Passat sold 68 cars, while the grossly overpriced CBU Camry 48 (majority from hotel sales?).

• The marketing-ignored Sonata only 47 cars. Hyundai has simply failed at cashing in on the diesel + comfort advantages of this competent sedan. Case closed.

Luxury Cars:

• The Mercedes C Class once again beats chief competitor BMW 3 series, with 173 cars sold (compared to 82 for the 3 series). YOY the C is in the green by 3.6% while the 3 series is hit 28%. The Merc is a better allrounder with its superior space & ride quality, the market seems to agree. BMW heavily marketed its 0% interest loan schemes, but the 3 series needs more.

• BMW takes a swing back at Mercedes in the 45 lakh segment with the 5 series managing 137 cars versus only 51 for the E Class. Lets see what the new E Class manages. Since Merc is only launching the expensive E350 at first, it will take some time before the E Class can hope to beat BMW in this all-too-crucial segment.

• Audi sold 118 A4s & A6s. The Q7 & A8 combined sold 56 cars. Audi has woken up in the last 12 months with its new (fancy) dealerships and marketing. Considering their current market position, Audi is going to have to work as hard - if not more - as BMW did in successfully establishing its Indian operations.

• The stunning 7 series outsold the more comfortable S Class (33 versus 30). Guess luxury is now being identified by BMW. Some change from the Indian identification with Merc as the definition of a luxury car. However too soon to confirm this changed definition.

• In another premium segment - that of SUVs - the BMW X3 & X5 (45) outsold the Mercedes M Class (16). Smart move by BMW in tapping a (new) premium SUV segment.

[GTO]

Utility Vehicles:

• Mahindra is on one heck of a trip, its commanding grip over the UV market segment stronger with 11,443 utility vehicles sold. The Bolero & Xylo are the strongest contributors to this growth.

• Don't laugh off the value perspective of the Omni (and Versa) just yet. Together, Maruti sold 6,600 of them in August!

• Toyota has established itself as a large UV player in the country with 4,100 Innovas sold. The Innova has single handedly taken Toyota's marketshare ahead of Honda.

• The Safari continues as a popular <10 lakh rupee SUV with about a 1,500 sales tally. Otherwise, Tata has really nothing to boast about. Its Sumo + winger sales are down to all time lows. Only 1,249 combined. Tata has focussed too much on its passenger cars, and too little on the very profitable UV segment. Even Toyota has beaten home boy Tata in large UV sales. The cheap ACE Magic (4,200 sales) is Tata's sole volume performer in the people mover segment.

• The Tavera-Captiva combine pulled in 1,134 customers. Its easy to conclude that the Tavera is outselling the Sumo consistently. And with good reason too.

• Force Motors sold 480 Trax (and some travellers) in August. Question is : Who is buying? And what is the USP here?

• Fortuner launch effect, HM-Mitsubishi sold about 118 Pajeros (down 42% YOY). I expect this number to be substantially affected by the cheaper, and more competent, Toyota.

• The Endeavour : An all time low of a meagre 39 units & 8th month of straight decline. Lets see what the facelift, and more importantly the Fortuner, do to Ford's SUV which was previously a market favorite. Politicians, builders & entry-level bollywood stars should move over to the Fortuner.

• Rhino's see-saw act goes on. 81 MUVs sold, this is certainly not a number enough to run a factory. I don't see any reason for the market to choose the Rhino over the UVs from more established players such as Mahindra, Toyota & Tata.

• Petrol SUVs won't sell in India. Period. Despite a more powerful engine, the Vitara manages an entirely ignorable 24 sales. On the other hand, the Gypsy 4x4 garnered 308 payments! Ironically, the net cash flow from a 20 year old Gypsy is more than a 3 year old premium SUV for Maruti. Unless the Vitara gets a diesel, its really not going anywhere.

• Look who's back? Why, its the Honda CRV with 77 new customers. After some months of zero imports, the Honda soft-roader is back on track now. Need to check on the onroad price.

• Tucson + Terracan = 0. I dont think Hyundai is bothered with any cars outside of its hatches & sedans in India, if its ignorance of the Sonata + Tucson is anything to go by. Unfortunate as I have driven the Tucson and do believe that it is a competent soft-roader. What's the point of spending 20 crores on launching a car if you aren't going to support it?

[amit]

The VW Jetta @ 335 cars sold!. Great for a late entrant and one that has limited dealerships.

The Civic continues its downward spiral, a measly 231 cars moved off showroom floors,

Jetta outsold Civic in August!

[vid6639]

Does the 4100 Toyota Utility vehicles include the Fortuner?

[vasudeva]

The excel sheet is enclosed here:

[harry10]

Originally Posted by amit

Jetta outsold Civic in August!

With the price increase i am expetcing civic sales to go more downwards.

Nice Report GTO and Vasudeva

FIat's 692.60% rise clearly indicates Linea and Punto effect.
Inspite of bad A.S.S reviews Skoda is managing 32.60% rise.Guess people still believe in the product if not the service.

[vasudeva]

Originally Posted by GTO

This Analysis has been jointly prepared by GTO & Vasudeva. Many thanks to Vasudeva for his support.

Analysis was primarily prepared by GTO. Anyway, production figures for 8/2009 highlight the fact that some are selling older stock resulting in discounts. These include:
1. Fabia: 0 production in 8/2009. Guess the reason for 4.43 lakhs. They also had 0 production in 7/2009, and 10 in 6/2009. Is it imported because I see very little production over the last few months. Something not consistent at least for 2009.
2. Honda produced 1729 Jazz in 8/09 but sold 1029. That is not typical of Honda and indicates huge overproduction. Similar overproduction for Logan, but then this has been the trend for this French car.
3. Optra produced 83, but sold 167. Not much effect of exchange of old junk for new.
4. Civic also over produced but could be the new one now in showrooms.
5. Merc continues to produce vastly less than sales indicating either old stock or imports. This is for all lines.
6. lots of old Sonata being sold. Perhaps a bias or prejudice on the part of the Indian consumer who prefer to pay more for Honda Accord or less for Corolla/Civi/Octavia.

Spark/UVA sales are the highest in their history.

[muralisk]

Awesome analysis and aptly backed by data. Great show GTO and Vasudeva. I very much look forward to read this report.

[mnhegde]

GTO and Vasudeva : Fantastic Report. Superb. This is the report I wait for eagerly every month. Very happy to see FIAT and FORD doing well.

[vasudeva]

Originally Posted by GTO

The Innova has single handedly taken Toyota's marketshare ahead of Honda.

In fact Honda should introspect as to why it has ceded the lead to Toyota, its closest competitor in terms of price and customer profile (and should I say quality and reliability). As the following figure shows, Honda has frittered away a huge gain over Toyota, especially after Altis and the over-priced City and Jazz. The second figure shows that over the last 1 year, except for the City's new 2008 spike, Toyota is narrowing the gap with Honda, and in fact leading in 7/09 and 8/09. Even Jazz from 6/2009 did not help Honda widen the gap with Toyota. Launch the Jazz with AT at same price as manual highest-specced Jazz, and there could be some new buyers.

[pats]

Great Report GTO & Vasudeva

As usual, the most keenly awaited thread to look forward for me at the start of every month.

A big surprise for me is of Honda Jazz. Eventhough considering its atrocious pricing i had felt that Honda would have a winner in its hand considering the Indian psyche towards the "H" brand.Declining sales in third month of launch is indeed bad news. Expect discounts and freebies if this continues.

Also it seems many of potential Jazz owners have moved to Fabia considering its consistent increase in sales over past two months.

[Sudan_NFS]

GTO and Vasudeva: I was very eagerly waiting for this report and again you given the best sale report .

CRV sold 77 which seem to be fishy for me. Did Honda gave any huge discount without any ads for CRV to sell.

[naveenvenkatesh]

Thanks Vasudeva and GTO for the great review.

Punto seems to be settling at 1500-1600 mark and Linea at about 800-900 mark. Fiat needs to get its act together and convert this good sales number into favorable word of mouth publicity by improving the after sales support. They should not throw away this golden opportunity.

Honda seem to be digging their own grave. If the new face lifted City does not improve their position, they may get trampled all over by the competition. They need to rethink their strategy for India. Just H badge will not get them anywhere. As GTO rightly said, VALUE is the only thing that matters in the <10 lakhs segment.