Auto Monthly- July 2010-Centrum

8/7/2019 Auto Monthly- July 2010-Centrum

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Strictly private and confidential

Wheels on the road (Auto Monthly)Wheels on the road (Auto Monthly)

July 2010

Ajay Shethiya

[email protected]

+91 22 4215 9855



2

SummarySummary

Source: Company, Centrum Research

Auto sales volumes in June 2010 registered robust 32% YoY growth. However, on a MoM basis, overall volume growth remained muted at

0.6%. Going ahead, we believe that with the onset of the monsoon, sales may see sequential weakness till August and start picking up post-

August, as the companies start building up inventories at the dealers’ end for the festive season.

Most of the OEMs have effected price increases – two-wheelers (1.5-2%), passenger vehicles ( 2-3%) and commercial vehicles ( 2-3%). Given

the buoyant demand across the segment, we believe these price increases would get absorbed in the market. Further, they would also help

companies partially mitigate the input cost pressure expected in 1QFY11E. details on slide no. 3

Sector Snapshot - Volume Break up

Monthly YTD

(Nos) Jun -10 Jun -09 May -10 YoY (%) MoM (%) FY11 FY10 YoY (%)

Bajaj Auto 315,422 193,202 299,442 63.3 5.3 928,336 547,662 69.5

TVS Motors 159,688 116,258 156,980 37.4 1.7 463,840 349,364 32.8

Hero Honda 426,454 365,734 435,933 16.6 (2.2) 1,284,039 1,118,987 14.8

Total 901,564 675,194 892,355 33.5 1.0 2,676,215 2,016,013 32.7

Ashok Leyland 8,400 3,966 6,502 111.8 29.2 21,402 7,693 178.2

Tata Motors 67,730 45,399 56,779 49.2 19.3 181,711 123,113 47.6

Maruti Suzuki 88,091 75,109 102,175 17.3 (13.8) 283,324 226,729 25.0

Mahindra & Mahindra 44,152 41,241 45,744 7.1 (3.5) 132,243 106,251 24.5

Total 208,373 165,715 211,200 25.7 (1.3)618,680 463,786 33.4



3

Dealer CheckDealer Check

We interacted with dealers across the board to get a sense on

the price revision and the waiting period.

Tata Motors’ dealers indicated about strong response for Indigo

GLx. Also, the waiting period for Maruti Suzuki’s Swift Dzire

continue to remain at 2-3 months.

Source: Dealers, Company, Centrum Research

Price Hike in 2W

Player Model Waiting period

Compact Cars

Hyundai Motors India Ltd Santro 3-4 week

Hyundai Motors India Ltd i10 Dlite 3-4 week

Hyundai Motors India Ltd i20 Era 3-4 week

Maruti Suzuki India Ltd Alto 7-10 days

Maruti Suzuki India Ltd Wagon R 7-10 days

Tata Motors Ltd Indica vista 15 days

Tata Motors Ltd. zeta 10 days

Sedan’s

Hyundai Motors India Ltd Accent 3-4 week

Hyundai Motors India Ltd Verna 1.6 VTVT 3-4 week

Maruti Suzuki India Ltd Dzire 2-3 month

Maruti Suzuki India Ltd SX4 7-10 days

Tata Motors Ltd Indigo Glx 10 days

Player Model Old Price New Price Abs Change Change %

Price Segment

Bajaj Auto Platina 125 44,998 45,998 1,000 2.22

Hero Honda CD Dawn 39,900 40,500 600 1.50

TVS Motors Star 46,900 46,987 87 0.19

Executive Segment

Bajaj Auto Discover 150 54,000 54,750 750 1.39

Discover 100 cc 50,356 50,856 500 0.99

Hero Honda Splendor PLUS 48,283 48,283 - -

Passion PLUS 51,245 51,815 570 1.11

TVS Motors Jive 50,875 50,875 - -

Premium Segment

Bajaj Auto Pulsar 180cc 71,951 73,451 1,500 2.08

Pulsar 150cc 71,151 72,651 1,500 2.11

Hero Honda Karizma 86,952 87,963 1,011 1.16

TVS Motors Apache 68,800 70,214 1,414 2.06

As indicated in our previous note, Bajaj Auto has officially indicated

increasing the prices for its motorcycle portfolio inline with our

assessment. TVS also followed suit by increasing the price s for its

motorcycle portfolio by 1-2%.

Based on our dealer-level interaction, we believe that even Maruti

Suzuki India Ltd (MSIL) will increase the prices across the models by

2-3% effective from 1st July 2010.

Ashok Leyland (ALL) to increase prices by 3% effective from 1st July

2010 across the categories.



4

Maruti Suzuki India (MSIL)Maruti Suzuki India (MSIL)

MSIL registered overall volume growth of 17.3% YoY driven by

17.9% domestic volume growth and 14.6% export growth.

Exports now contribute 14% to the overall volumes compared to

9% in FY09.

MSIL suffered production loss of 6 days on account of planned

maintenance shutdown of facilitates.

Management said sales to Europe could drop 10-15% in FY11Eover FY10. However, it also indicated the better-than-expected

traction in Latin America, Middle-east and new export

destination will help the company is offsetting the volume loss

seen from European markets.

Our interaction with MSIL dealers indicated that the company is

planning to increase the prices for its models across the bard by

2-3% effective from 1st of July 2010.

Monthly YTD


A1 2,090 2,438 2,558 (14.3) (18.3) 6,906 7,119 (3.0)

C 9,914 6,890 12,953 43.9 (23.5) 33,521 22,233 50.8

A2 51,418 46,156 62,679 11.4 (18.0) 170,513 146,733 16.2

A3 8,081 6,099 10,883 32.5 (25.7) 28,958 19,947 45.2

Tot PC 71,503 61,583 89,073 16.1 (19.7) 239,898 196,032 22.4

MUV 1,309 190 968 588.9 35.2 2,989 1,383 116.1

Domestic 72,812 61,773 90,041 17.9 (19.1) 242,887 197,415 23.0

Exports 15,279 13,336 12,134 14.6 25.9 40,437 29,314 37.9

Total Sales 88,091 75,109 102,175 17.3 (13.8) 283,324 226,729 25.0


MSIL – Sales figures

MSIL - Volume Break up

7280

75 7885 83 85 88

85

96 97 95 93

102

88

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20

40

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120

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(000's)



5

Mahindra & Mahindra (M&M)Mahindra & Mahindra (M&M)

M&M’s UV portfolio declined 3.6% YoY and 10.2% MoM.

Tractor volumes, inclusive of Punjab Tractors (PTL), also dropped

9.1% YoY and 3.9% MoM.

Our interaction with Gujarat-based dealers for Yuvraj tractors

indicated that the product has been well received and the

company has been able to sell more than 1,500 units post the

launch.

The product is aggressively prices at Rs180, 000 compared to VST

Tillers’ 18.4HP tractor, which is priced at Rs258,000. However,

adjusted for subsidy of Rs60,000, the effective price comes down

to Rs200,000.

Monthly YTD


UV 17,010 17,653 18,940 (3.6) (10.2) 53,948 48,720 10.7

LCV* 1,111 1,014 1,007 9.6 10.3 2,978 2,493 19.5

Logan* 563 501 450 12.4 25.1 1,316 1,478 (11.0)

Total (4W) 18,684 19,168 20,397 (2.5) (8.4) 58,242 52,691 10.5

3-Wheelers 7,559 3,357 6,641 125.2 13.8 20,076 9,032 122.3

Exports# 1,319 473 1,450 178.9 (9.0) 3,775 1,145 229.7

Total (3w & 4W) 27,562 22,998 28,488 19.8 (3.3) 82,093 62,868 30.6

Tractors (Domestic) 15,411 17,811 16,608 (13.5) (7.2) 47,718 41,963 13.7

Tractors (Exports) 1,179 432 648 172.9 81.9 2,432 1,420 71.3

Tractors 16,590 18,243 17,256 (9.1) (3.9) 50,150 43,383 15.6

Total vehicles 44,152 41,241 45,744 7.1 (3.5) 132,243 106,251 24.5


M&M – Sales figures

35

30

41

3533

45 44

35 36

47

41

48

4246 44

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60

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a y - 1 0

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(000's)

M&M – Volume Break up



6

Tata Motors (TAMO)Tata Motors (TAMO)

TAMO’s M&HCV segment registered 50.1% YoY and 9.9% MoM

growth. The LCV segment registered a strong YoY growth of

29.3% and 10.4% MoM growth.

The passenger car segment also registered a strong growth of

82.1% and 34.2% on YoY and MoM basis respectively.

The growth was largely driven by doubling of Nano sales (7,400

unit’s vs. 3,500 units in April/May 2010) and strong response forIndigo GLx.

` Monthly YTD(Nos) Jun -10 Jun -09 May -10 YoY (%) MoM (%) FY11 FY10 YoY (%)

HCV 16,400 10,927 14,922 50.1 9.9 45,298 28,965 56.4

- Domestic 15,139 9,949 13,860 52.2 9.2 42,156 26,626 58.3

- Exports 1,261 978 1,062 28.9 18.7 3,142 2,339 34.3

LCV 22,023 17,037 19,943 29.3 10.461,639 47,358 30.2

- Domestic 19,652 16,256 17,615 20.9 11.6 55,073 45,430 21.2

- Exports 2,371 781 2,328 203.6 1.8 6,566 1,928 240.6

CAR 25,668 14,093 19,125 82.1 34.2 64,979 38,673 68.0

- Domestic 24,209 13,732 18,618 76.3 30.0 62,589 37,772 65.7

- Exports 1,459 361 507 304.2 187.8 2,390 901 165.3

UV 3,639 3,342 2,789 8.9 30.5 9,795 8,117 20.7

- Domestic 3,602 3,307 2,708 8.9 33.0 9,650 8,065 19.7

- Exports 37 35 81 5.7 (54.3) 145 52 178.8

Total 67,730 45,399 56,779 49.2 19.3 181,711 123,113 47.6


3840

4548 50

53 53 54 52

6569

75

57 57

68

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(000's)

TAMO – Sales figures

TAMO – Volume Break up



7

Ashok Leyland (ALL)Ashok Leyland (ALL)

ALL’s M&HCV segment registered a YoY growth of 117.4% and

29.6% on a MoM basis.

The domestic LCV segment registered a YoY domestic growth

of 29.7% and strong MoM growth of 15.7%.

ALL has taken price increase effective from 1st of July 2010

across the categories to extent of 3%.

ALL’s management has guided for overall volumes of 85,000

units for FY11E compared to 64,000 units for FY10, implying a

YoY growth of 33%.


ALL – Sales figures

ALL – Volume Break up

Monthly YTD


Domestic 1,795 1,016 1,213 76.7 48.0 4,184 2,211 89.2

Exports 409 130 223 214.6 83.4 904 274 229.9

MDV Passengers 2,204 1,146 1,436 92.3 53.5 5,088 2,485 104.7

Domestic 5,608 2,388 4,677 134.8 19.9 15,059 4,427 240.2

Exports 472 277 281 70.4 68.0 980 526 86.3

MDV Goods 6,080 2,665 4,958 128.1 22.6 16,039 4,953 223.8

Total HCV 8,284 3,811 6,394 117.4 29.6 21,127 7,438 184.0

Domestic 96 74 83 29.7 15.7 219 152 44.1

Exports 20 81 25 (75.3) (20.0) 56 103 (45.6)

Total LCV 116 155 108 (25.2) 7.4 275 255 7.8

Total Vehicles sold 8,400 3,966 6,502 111.8 29.2 21,402 7,693 178.2

2

4 4 5

5 5

5

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7 7

8

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(000's)



8

Bajaj Auto (BAL)Bajaj Auto (BAL)

Driven by the continued momentum for Pulsar and Discover, BAL

registered a YoY growth of 68.4% in the motorcycle segment.

However, on a MoM basis, the segment registered a marginal

growth of 5%.

During the month, the company sold 20,000 units of new Discover

150cc). The management indicated loss of 15,000-20,000 units on

account of supply constraints. Management indicated that motorcycle production of 3,00,000

units/month and three-wheeler capacity of 35,000 units/month is

expected to go on stream by July 2010.


169185 193 193

213

281 280 277252

266 269 274

313299

315

0

50

100

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350

A p r - 0 9

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BAL – Sales figures

BAL – Volume Break up

Monthly YTD


Bajaj Auto

- Motorcycles 282,808 167,945 269,488 68.4 4.9 828,391 482,727 71.6

- Total 2-wheelers 282,808 168,471 269,48867.9 4.9

828,418 484,42071.0

- Three-wheelers 32,614 24,731 29,954 31.9 8.9 99,918 63,242 58.0

Total Sales315,422 193,202 299,442 63.3 5.3 928,336 547,662 69.5



9

Hero Honda Motors (HH)Hero Honda Motors (HH)

HH registered a YoY growth of 16.6% in volumes. However, on a

MoM basis, it registered a marginal drop of 2.2%.

HH’s monthly numbers have been better than our expectations and

has been consistently able to maintain overall volumes in excess of

0.4mn units.

HH recorded highest ever quarterly sales in Q1FY11, with a growth of

10% over Q1FY10.

Our interaction with dealers indicate that the supply constraints

have been resolved and the waiting period is not more than 10-15

days across the models.

The scooter segment continues to do well with Pleasure maintaining

its monthly run rate (MRR) of 25,000 units.

Monthly YTD


Hero Honda

- Motorcycles 426,454 365,734 435,933 16.6 (2.2) 1,284,039 1,118,987 14.8

Total Sales 426,454 365,734 435,933 16.6 (2.2) 1,284,039 1,118,987 14.8


371 383366 366

415 401

354381 376

390 382415 422 436 426

0

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500

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(000's)

HH – Sales figures

HH – Volume Break up



10

TVS Motors (TVSL)TVS Motors (TVSL)

During June 2010, TVS’ motorcycle segment reported a strong

YoY growth of 44.3%. Scooter and the moped segments

continued to register a strong YoY growth of 41.6% and 23.1%,

respectively.

As a result, the overall two-wheeler volumes registered a

healthy growth of 35.7%.

The three-wheeler sales for TVS crossed 3,000 units for the firsttime registering sales of 3,003 units compared to 2,313 units for

May 2010 and 810 units for June 2009.

Monthly YTD


TVS Motors

- Scooters 36,742 25,945 31,884 41.6 15.2 95,486 67,250 42.0

- Motorcycles 66,452 46,048 67,906 44.3 (2.1) 200,358 152,778 31.1

- Mopeds 53,491 43,455 54,877 23.1 (2.5) 160,197 127,113 26.0

- Total 2-wheelers 156,685 115,448 154,667 35.7 1.3 456,041 347,141 31.4

- Three-wheelers 3,003 810 2,313 270.7 29.8 7,799 2,223 250.8

Total Sales 159,688 116,258 156,980 37.4 1.7 463,840 349,364 32.8


114119 116

122128

144132

122 121127

143149 147

157 160

0

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180

A p r - 0 9

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(000's)

TVSL – Sales figures

TVSL – Volume Break up



Relative ValuationsRelative Valuations

7.58.59.211.62.11.744625420115 TVSL TVS - Standalone

10.812.614.115.927.524.533302031803882,010HHHero Honda

10.211.712.313.723.821.332291661472922,437BJAUTBajaj Auto

9.411.111.013.86.85.41210108927467ALAshok Leyland

7.28.513.215.130.927.147413853364101,393MSILMaruti Suzuki

7.18.010.311.430.527.64642380336313626MMM&M - Consolidated

9.911.612.414.125.322.33732249217313626MMM&M - Standalone

4.76.08.412.246.532.11251041,088971393768 TAMO TAMO - Consolidated

10.412.315.919.224.620.45647509435393768 TAMO TAMO - Standalone

(x)(x)(in Rs bn)(in Rs bn)(in Rs bn)(in Rs Bn)(in Rs)

FY12EFY11EFY12EFY11EFY12EFY11EFY12EFY11EFY12EFY11EMarket CapCMPTickerCompany

EV/EBITDAP/EPATEBITDARevenue

Source: Bloomberg, Centrum Research





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