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- Passenger car volumes decline 10.4% YoY; Utility vehicles growth slows down to 4.0% YoY - Commercial vehicles volumes post a marginal growth (up 0.7%) YoY - Domestic Two-Wheeler volumes grow 0.9% YoY; exports shrink by 18.0% YoY - Three-Wheeler witnesses strong recovery in export volumes during the month
Summary
Passenger Vehicles: Volumes shrink for the fifth consecutive month on a YoY basis
Domestic passenger vehicle (PV) volumes declined by 8.2% YoY in April 2013, making it the fifth consecutive month of negative growth for the PV industry. While most PV segments shrunk in size, consumer demand was particularly weak for compact segment cars (that account for 30% of domestic PV volumes) whose volumes declined by 17.6% YoY. The Utility Vehicles (UV) segment, which had grown by 52.2% in 2012-13 over the previous year, also experienced a significant moderation in its momentum reflected in volume growth of 4.0% YoY. In our view, this was attributable to the high base of April 2012 ( when volume run-rate of few new models was on the ascendency), recent hike in excise duty on SUVs and rising diesel prices. In terms of discounts, OEMs demonstrated a mixed strategy in April: select OEMs chose to reduce the quantum of discounts while others either maintained discounts at levels prevailing in Q4 2012-13 or increased concessions. Amongst top five OEMs in India, by sales volumes, Maruti Suzuki and M&M recorded flat volume growth; while Hyundai, Tata Motors and Toyota saw their volumes shrink during April 2013 on a YoY basis. Overall, domestic PV demand continues to remain dull and discounts-driven sales push is likely to remain the salient theme in the near term.
Commercial Vehicles: Domestic CV volumes grow by 0.7% in April 2013 compared to a decline of 7% in H2 2012-13
After witnessing a decline of 7% in H2 2012-13, the domestic CV sales (in volume terms) grew by 0.7% in April 2013 on a YoY basis led by growth in the passenger carrier segment of both LCV and M&HCV segment. The extent of drop in M&HCV (truck) sales also reduced to 10% compared to 30%+ drop witnessed by the segment over the past five months. In our view, the lower drop in volumes is largely on account on low-base of the prior year. On the flip side, the LCV (truck) segment has started showing some signs of sluggishness with growth moderating down to 3.1% in April 2013 compared to 15% in H2 2012-13 and 17% in H1 2012-13. Overall, the demand continues to shift in favour of 2-3.5t segment on back of increasing acceptability of newly launched models in that segment.
Three Wheelers: Domestic three-wheeler volume expand by 7% in April; Export volumes too jump sharply
The Domestic three-wheeler segment witnessed a growth of 7% in April 2013 on back of modest fresh permit issuances as well as replacement demand. Compared to relatively weaker demand in 2012-13, the growth in the domestic three wheeler segment in April could be attributed to both passenger as well as goods carrier segment. On the exports front, the demand for three-wheelers appears to be stabilizing now (up 19% in April) on back of low-base of the prior year which saw sharp contraction owing to sharp rise in import duties in Sri Lanka.
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Trends in respective segments of the Passenger Vehicle Industry a. b. c. d. e. f. Industry Trends: Lack of demand catalysts continues to thwart industry volume growth Mini Car Segment: Volume growth recovers in April; low base of previous year to support near term volume growth Compact Car Segment: Poor performance run of last three quarters continues in April 2013 Super Compact Car Segment: Fastest growing segment in April 2013 Mid-Size Car Segment: Buyers tendency to switch from mid-size sedans to value segment of UVs hurting formers growth Executive Car Segment: The pie continues to shrink Demand recovery prospects remain weak on both domestic as well as exports front Demand sluggishness persists in 100cc segment of motorcycles Light Commercial Vehicle Segment: Initial signs of moderation in growth momentum in SCVs appearing Medium & Heavy Commercial Vehicle Segment : Volumes drop by only 7% in April 2013 compared to 32% in H2 2012-13 Domestic three-wheeler volume expand by 7% in April; Export volumes too jump sharply April brings a spurt in demand
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Trend in Three Wheeler Industry: a. a. Trends in the Domestic Tractor Industry: ICRAs Outlook on the above segments
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