Dalal Street Investments

Auto Sales Skid off the Road

November 19, 2008

Data for the month of October 2008 shows that the combined two wheeler and three wheeler industry volumes declined significantly by 10% Y-o-Y for the first time in FY09. Despite the festival period falling in the month of October 2008, sales at the companies’ end plunged sharply due to a huge pile up of inventory of the previous month at the dealer network, though retail sales recorded an increase.

Hero Honda (HH) – Decline in domestic volumes of entry-level Motorcycle segment (75-125cc) pull down overall volumes. Motorcycle sales were down 4.9% Y-o-Y and 10% sequentially to 335,754 units. Scooter sales witnessed a growth of 38% Y-o-Y to 16,695 units.

Bajaj Auto’s overall volumes declined sharply by 31% Y-o-Y and 21.8% sequentially to 191,840 units, due to a significant decline of 47.6% Y-o-Y in domestic sales to 116,748 units in October 2008. The company’s overall Motorcycles volumes plunged 34% Y-o-Y to 163,850 units, aided by the export growth of 42.3% Y-o-Y to 61,608 units.

TVS’s total volumes for October 2008 declined 9.7% Y-o-Y and 14.7% sequentially to 117,101 units. The company’s Motorcycle sales fell 11% Yo-Y to 60,273 units.


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