Vehicle sales drive around note ban in south

However, northern and western markets have taken a hit

Demand for passenger cars and two-wheelers in the south was not impacted during the December quarter, while the northern and western markets have taken a hit, it appears.

Demand for medium and heavy commercial vehicles (M&HCVs) was weak in the western and southern states in the quarter; demand in northern states was relatively steady.

A report from the Society of Indian Automobile Manufacturers and Kotak Institutional Equities Research says passenger vehicle (PV) sales in the country rose by 1.5% during the quarter, to 749,051 units from 738,135 in the same period a year before. The growth was mainly from the south, which reported nine% more to 205,484 units.

In April-December, first nine months of this financial year, sales in the south grew by 16.9% to 672,725 units. That in the north grew by 0.3% to 608,287 units.

In the south, Tamil Nadu and Kerala saw 13.4% and 13.8% growth in the quarter; Andhra and Telangana grew  11.8%. Karnataka reported a 0.9% drop.

Two-wheeler volumes in eastern states saw a steep decline but southern states continued to grow. The south saw 13.4% more to 10,46,796 units; the north saw a 0.3% drop to 980,239 units. The west was the worst hit, where two-wheeler sales dropped by 14.8% to 1,277,964 units.

And, the scooter mix in two-wheeler volumes declined to 31%. This was three percentage points down from a year before. Volumes fell the most in the western region, by 15%. The southern states saw growth of 14%.

Hero MotoCorp lost 400 basis points in market share from a year before in the quarter, as it corrected dealer inventory sharply. Royal Enfield, Yamaha Motors and TVS Motor gained market share -- due to a strong waiting period for RE bikes, new scooter launches by Yamaha and a successful moped launch by TVS. 

Royal Enfield and TVS also have a higher market share in the south versus their overall share in India, which also benefited both.

Contrary to the trends in the PV and and two-wheeler segments, demand for CVs was less impacted in the north than in the south. CV volumes grew in both the MH and light tonnage segments in the north, while declining sharply in the south. MHCV demand was weak in the west and south but demand in the north was relatively steady.

The south saw a 4.5% drop to 13,865 units. The east and west also reported a 1.3% and 5.5% drop, respectively, while the north reported a 0.5% increase in sales to 16,620 units.

Among the top three companies, Ashok Leyland was the only one to gain market share. Tata Motors' dropped to 51.6% from 54%  earlier; Eicher's dropped to 10.2% from 11.6%. Leyland's rose to 34%, from 30.2%. 

Dent On Volumes

• A report of Siam and Kotak Institutional Equities Research says PV sales in the country rose by 1.5% during the quarter
• In the south, Tamil Nadu and Kerala saw 13.4% and 13.8% growth in the quarter; Andhra and Telangana grew 11.8%
• Two-wheeler volumes in eastern states saw a steep decline but southern states continued to grow 
• For 2-wheelers, the south saw 13.4% more to 10,46,796 units; the north saw a 0.3% drop to 980,239 units. The west was the worst hit