Two-wheeler makers in India can heave a sigh of relief as the recovery seen during the end of last year seems to have held up in February, even as sales of commercial vehicles and basic cars seem to have slid again.
Two-wheeler revival
Two-wheelers continued to be the highlight of the auto industry in February, with companies continuing to post strong increases across segments.
Leading from the front was Chennai-based TVS Motor Company, which reported a whopping 34% jump in its monthly two-wheeler sales to 3.58 lakh units. This was powered by both domestic sales – which rose 21% to 2.68 lakh units, as well as exports, which doubled to 90,308 units.
From a product perspective, there was greater growth in motorcycles (up 46%) compared to scooters (up 26%).
At no.2 was Bajaj Auto with a 25% increase in two-wheeler sales to 2.95 lakhs in February.
This was powered largely by domestic sales, which were up 42% to 1.71 lakh units, while exports rose only by 8% to 1.24 lakh units.
Close behind was the market leader, Hero MotoCorp, with a 19% increase in its two-wheeler sales to 4.68 lakh units.
The surge in domestic sales hints at an improving condition of buying mentality among rural consumers. This comes as a relief as several industries have been suffering at the hands of rising inflation and declining rural demand.
The marketing strategies of the companies, especially the new product launches have also seemingly paid off well.
TVS had recently launched the 2024 versions of its popular Apache and Jupiter models. Hero Motocorp had recently introduced its new launches, the Xtreme 125 R motorcycle and Mavrick 440 in the premium segment. The company has pointed out that it plans to focus on strengthening its premium product range besides growing its core portfolio.
SUV’s
The SUV segment continued to be the only one that has seen uninterrupted growth since the COVID lockdown.
February was another month of strong growth for this segment, with players such as Maruti Suzuki and Mahindra & Mahindra reporting strong demand.
The largest carmaker in the country, Maruti Suzuki, saw its UV sales jump 83% during the month to 61,234 units. According to the company, the growth was led by strong demand for the company's utility vehicles like the Brezza, Grand Vitara and XL6.
Another key player, Mahindra recorded a 40% surge in domestic SUV sales by selling 42,401 units. Mahindra said it is looking forward to further boost its SUv sales with recent launches such as Scorpio N Z8S variant and the Thar Earth editions.
The third major player in the passenger vehicle segment, Tata Motors, also reported a strong increase in February sales. The company’s passenger vehicle sales – which comprises a mix o UVs and cars – rose 19% in February to 51,321 units.
The growth was led by strong domestic demand which stood at 51,267 units, up 20% year-over-year. Electric vehicle sales also witnessed robust growth of 30% to 6,923 units sold.
At the same time, the mini and compact cars continued to suffer. Sales of Alto and S-Presso – the smallest cars from Maruti Suzuki – declined 32% to 14,782 units. Sales of slightly bigger sized models like Swift, WagonR and Baleno – which used to drive Maruti’s sales and profits – also fell, but not as much. They were down 10% to 71,627 units.
However, thanks to the strong show by UVs, total passenger vehicle (PV) sales were up 9%.
Commercial Vehicle
Another category that is caught up in a slowdown seems to be commercial vehicles, which are used to move goods and people.
The biggest decline in this segment was seen in Chennai-based Ashok Leyland whose sales in the domestic market fell by 6% during the month to 16,451 units.
Within its various categories of products, the biggest decline was seen in the medium and heavy category, which fell 9%, while light commercial vehicles saw a decline of 2%.
It attributed the lackluster sales to factors such as high inflation, rising fuel prices and high lending rates that have weakened the demand environment. Nevertheless, Ashok Leyland is hopeful of ending FY2024 with moderate growth in volumes compared to the industry growth expectations of flat volumes during the fiscal.
The story was not very different for Tata Motors, India’s biggest CV maker. Domestic commercial vehicle sales declined 4% to 33,567 units while exports grew 7% to 1,518 units.
In terms of various weight categories, the sharpest decline was seen in the light CV segment, where volumes fell 15%, followed by the medium and heavy segment, which saw a 7% decline.
Passenger carrier, such as buses and vans, provided some respite, with sales growing 29% over the last year.
Unlike its bigger peers, Eicher Motors was able to record a modest increase, with sales up 2.1% at 7,246 units.
Domestic sales witnessed a growth of 1.9% to 6,930 units from 6,799 units in the same month last year. In the domestic market, sales of light-medium duty trucks grew 2% while heavy-duty truck sales declined 1%. The light-medium duty bus segment continued its strong momentum with a 12% spike in volumes.
Another exception to the overall declining trend was Mahindra & Mahindra’s commercial vehicle division. The unit saw strong growth in certain segments such as those under 2 tonnes rising by 65% and medium/heavy commercial vehicles jumping 167%. However, sales of the intermediate 2-3.5 tonne truck segment declined 8%.