>Automobile Sector (PINC RESEARCH)

On a recovery course……

Indian automobile sector reported an improved performance during the month of Mar’09. On a sequential basis, there has been a marked up-tick in the primary dispatches by the major auto players. Passenger cars and 2-wheelers were two segments which have done well. While domestic 2-wheelers sales improved, exports were weak with decline in volumes. Domestic passenger cars sales were boosted by the discounts and offers on the products. Exports were healthy with Maruti and Hyundai growing their penetration in the European market. Medium and Heavy Commercial Vehicles (MHCV) segment continues to be in a declining phase though there is sharp improvement sequentially.

* 2-wheelers: Overall industry performance has been good though Bajaj Auto continues to post a decline in its monthly sales. Honda Motorcycles & Scooters India (HMSI) and Yamaha have shown a strong growth in the motorcycle segment.

* Passenger Vehicles: Passenger cars and Utility vehicles reported strong performance. Utility vehicles has got a big boost due to National Elections. Hyundai reported a decline in domestic sales which is largely a factor of big base. Maruti Suzuki reported their best ever monthly sales.

* Commercial Vehicles: MHCV is on a gradual recovery phase for the last two months. However, we believe that this segment will be adversely impacted by elections and monsoons thereafter. So, we do not expect the segment to stabilise before Sep’09. Light Commercial Vehicles (LCV) segment has done well and we believe that this segment is in a secular growth phase due to large requirement for last mile connectivity.

To see full report: AUTOMOBILE SECTOR