ICRA LIMITED Summary Since the beginning of the current fiscal, the industry has witnessed slowdown in demand partly contributed by rising interest rates and fuel prices, cumulatively impacting consumer sentiment. During Q1 FY12, the domestic market has grown by only 8.7% on YoY basis. Within segments, small cars, which accounts for almost 80% of total volumes has been impacted the most, witnessing a marginal growth of 4.3% during the quarter. While trends vary across segments, the premium & luxury end segment of both passenger cars and Utility Vehicles (UVs) continues to remain somewhat insulated by macro-economic headwinds, registering a healthy growth. Our channel check suggests that since April 2011 footfalls at dealerships have reduced and so have the conversion ratios (fr om enquiries to actual purchase). Much of the slowdown is on account of weakening consumer sentiment amid rising interest rates and increase in fuel prices. Consumers have also deferred purchases in anticipation of host of new launches expected in the H2 of current year. As a broader trend, inventory levels have increased at dealerships from 20-30 days (on steady state basis) to as high as 50-60 days (for some models). With increasing petrol prices, demand for diesel-backed cars has risen with hot-selling models having long waiting periods. The benefits of diesel vehicles however could reduce in the event of any increase in excise duty specific for diesel vehicles and/or implementation of dual pricing of diesel (personal and commercial use). We believe the growth momentum to pick up from the start of festive season, which will also be coupled with launch of certain new models across segments. Overall, we expect the growth momentum to slowdown dur ing the current year and expect industry to grow by 7-8% in FY12. Export volumes are also likely to remain subdued considering the weak demand from European region. We maintain our long- term five year CAGR growth rate at ~11%. The Indian passenger vehicle industry has been on a strong growth phase over the past decade riding on back of strong economic growth, rising disposable income levels, favourable demographics and adequate financing availability. The strong pace of new vehicle offerings by new OEMs and relatively low penetration levels have also contributed to the growth momentum. Over the past years (i.e. 2007-11), the industry has grown at CAGR (%) of 16.3% with growth being particularly strong in the past two years. Table 1: Segment-wise volumes Segments Volumes YoY Growth (%) FY09 FY10 FY11 FY12e FY09 FY10 FY11 FY12e Domestic 1,552,703 1,951,333 2,520,421 2,709,453 0.2% 25.7% 29.2% 7.5% Exports 335,729 446,479 453,479 494,292 53.7% 32.9% 1.6% 9.0% INDIAN PASSENGER VEHICLE SECTOR Consumer sentiment weakens on rising interest and fuel costs QUARTERLY REVIEW AUGUST 2011 ICRA RATING FEATURE Corporate Ratings Anjan Deb Ghosh +91 22 3047 0006 [email protected]Contacts: Subrata Ray +91 22 3047 0027 [email protected]Shamsher Dewan +91 124 4545 328 [email protected]Shishir Kumar +91 124 4545 822 [email protected]
Transcript
ICRA LIMITED
Summary Since the beginning of the current fiscal, the industry has witnessed slowdown in demand partly contributed by rising interest
rates and fuel prices, cumulatively impacting consumer sentiment. During Q1 FY12, the domestic market has grown by only 8.7% on YoY basis. Within segments, small cars, which accounts for almost 80% of total volumes has been impacted the most, witnessing a marginal growth of 4.3% during the quarter. While trends vary across segments, the premium & luxury end segment
of both passenger cars and Utility Vehicles (UVs) continues to remain somewhat insulated by macro-economic headwinds, registering a healthy growth.
Our channel check suggests that since April 2011 footfalls at dealerships have reduced and so have the conversion ratios (fr om enquiries to actual purchase). Much of the slowdown is on account of weakening consumer sentiment amid rising interest rates and increase in fuel prices. Consumers have also deferred purchases in anticipation of host of new launches expected in the H2 of
current year. As a broader trend, inventory levels have increased at dealerships from 20-30 days (on steady state basis) to as high as 50-60 days (for some models). With increasing petrol prices, demand for diesel-backed cars has risen with hot-selling models having long waiting periods. The benefits of diesel vehicles however could reduce in the event of any increase in excise duty
specific for diesel vehicles and/or implementation of dual pricing of diesel (personal and commercial use). We believe the growth momentum to pick up from the start of festive season, which will also be coupled with launch of certain new models across segments.
Overall, we expect the growth momentum to slowdown dur ing the current year and expect industry to grow by 7-8% in FY12. Export volumes are also likely to remain subdued considering the weak demand from European region. We maintain our long-
term five year CAGR growth rate at ~11%. The Indian passenger vehicle industry has been on a strong growth phase over the past decade riding on back of strong economic growth, rising disposable income levels, favourable demographics and adequate financing availability. The strong pace of new vehicle offerings by new OEMs and relatively low penetration levels have also
contributed to the growth momentum. Over the past years (i.e. 2007-11), the industry has grown at CAGR (%) of 16.3% with growth being particularly strong in the past two years.
Source: ICRA Estimates; Assumptions – Loan value – 5.1 lacs; Tenor – 5 Years
Growth momentum losing steam After reporting strong growth over the past two fiscals, the domestic
passenger vehicle industry has started witnessing slowdown with Q1 FY12 reporting a relatively modest 8.7% growth on YoY basis. Within the industry, the cars segment grew by 7.2%, while UVs and Multi Purpose
Vehicles (MPVs) reported a growth of 5.1% and 29.2%, respectively. Successive rise in interest rates on back of RBI’s monetary tightening stance coupled with rise in fuel prices are key factors affecting consumer
sentiment, leading deferment of purchases. While April and May were relatively better months, partly helped by increase in inventory position at the dealer level; June and July sales have been significantly weaker
given the destocking done by dealers. Among segments, the small car segment, which account for over 80% of
the volumes have been impacted the most, while mid-size segment owing to new product launches has been somewhat insulated from the slowdown so far. The premium & luxury end segment of both cars and
UVs also continue to post steady growth due to low-base effect and by virtue of being relatively inelastic to rise in ownership cost.
Rising interest rates & fuel prices impacting consumer sentiment In our opinion, rising interest rates and fuel prices largely impacts
consumer sentiment as it has relatively small impact on incremental outgo from an average monthly household income. For instance, the EMI for a 5 year loan on mid-size sedan with a price tag of Rs. 6.0 lacs
increases by only 2.3% (i.e. Rs. 250/EMI) for every 100 bps increase in interest rates and the impact of fuel price hike is also negligible on household income levels (as shown in table alongside)
In our view, availability of finance plays a much important role in driving demand for cars in comparison to movement in interest rates. In India,
over a longer period, interest rates have declined, and remain much below historical highs supported by favourable interest rate regime and relatively healthy performance of the asset class amongst various
consumer finance categories. This has also encouraged lengthening of tenors and LTVs, further facilitating flexibility for consumers.
ICRA LIMITED
76.8% 75.1% 72.6% 69.7%
9.0% 10.1% 14.5% 16.8%
14.2% 14.8% 12.9% 13.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
FY09 FY10 FY11 Q1 FY12
Top 3 Players Emerging Players Others
Key Industry Trends
Chart 2: Emerging players are gaining market share
Source: SIAM, ICRA’s Estimates ;
Note – Emerging players include General Motors, Ford, Toyota, Volkswagen & Nissan
Table 3: Expected refurbished offerings in the sub 4,000 mm segment
OEM New Offerings Expected Launch
Maruti Suzuki New Swift Dzire 2012
Tata Motors Indigo Manza CS 2012
Volkswagen UP Saloon 2013
Honda Brio Sedan 2013
M&M Mini Xylo 2011
M&M Verito 2011
Hindust an Motors Ambassador 2012
Source: Media Releases
Competitive pressures intensifying; new players gaining market share In line with our expectation, the competitive pressures in the Indian passenger vehicle industry continue to intensify given the momentum with which new OEMs are increasing their presence in the domestic market. The
strong growth prospects and growing size has attracted most OEMs in the Indian markets and with favourable response to multiple launches, the market share of new players (as shown in the graph alongside) continues to
rise. While we believe, incumbents will continue to derive competitive
advantage on back of their strengths in low-cost manufacturing (especially in the small car segment), established vendor base strong brand identity and wide-spread distribution & servicing reach, such an advantage is likely
to diminish in the long-run as new players with global experience gain brand recognition and expand their product offerings and network.
Presence in the small car segment (with superior product offerings), a spread out dealership and servicing network and competitive pricing on back of locally sourced auto components are going to be key factors in
determining market share gains. Mid-size segment likely to see many launches including refurbishment in the sub 4,000mm category Apart from host of launches expected in the near term, another trend that is being witnessed by the industry is the introduction of refurbished models
of existing platforms to qualify for lower excise duty benefit offered on car that are less than 4,000 mm in length (with engine size less than 1.2 litre on petrol & 1.5 litre on diesel cars).
While Tata Indigo CS was the first car with a trimmed boot to take advantage of this duty cut, others OEMs have also lined up trim downed
models to benefit from lower excise duty, which in our view brings down the cost by almost Rs. 40,000-50,000 per car. Apart from passenger cars, certain MPVs are also likely to come out with their compact versions like Mini Xylo (2011 launch) and Volkswagen Bulli (2014 launch)
Emerging players are
gaining market share
ICRA LIMITED
Key Extracts from Channel Check We interacted with various PV dealers and auto ancillaries to get a view on the developing trends in the passenger vehicle in dustry and accordingly build our near-term outlook on PV sector. The consensus view suggests that the industry which is currently experiencing slowdown is expected to recover in H2 FY12,
while pressure on margins and competitive intensity on OEMs is expected to continue.
Interaction with PV Dealers Consumer sentiment has turned negative over the past few months largely driven by ri sing interest rates (about 150-200 basis point increase in
PV financing rates in last three months) and hike in fuel price. Deferment of purchase by customers in wait for new launches and supply bottlenecks in some of the top selling models in light of earthquake in
Japan and strike at Maruti are also some of the reasons impacting growth While there has been some moderation in enquiry levels, the decline in conversion ratio has been rather significant Growth in FY12 is expected to be back-ended and OEMs are hopeful of the current demand trend reversing over the next quarter Inventory levels at dealerships have gone up from an average 20-30 days to as high as 50-60 days. Consequently many dealers reduced their off-
takes from OEMs in June and focused on inventory liquidation, resulting in fall in OEM volume sales Discounts offered by OEMs have risen sharply; were at an all time high in May and June (even higher than that in March), but sales continue to
remain lackluster and sales in July also expected to remain weak Prohibitive real estate cost and lack of vacant retail space at prominent locations has prevented coming up of new automobile dealerships. As a
result, there are quite a few instances of dealer poaching by new market entrants In a bid to lure interested parties and ensure dealer viability given the low initial volumes, newly entered foreign OEMs are offering higher margin
to dealers. Moreover, these new OEMs are also providing better credit terms to their dealerships.
Interaction with auto component suppliers Current slowdown has not resulted in any change in production schedules by OEMs so far. The market however perceives some moderation in the
volume estimates of car manufacturers
Slowdown is likely to be temporary with growth expected to pick from festive season. OEMs as well as component suppliers are going ahead with their budgeted capex plans and there is no deferment/moderation in the same
OEMs continue to focus on cost rationalization through process optimization, localization, material change, weight reduction and yield improvement on
an ongoing basis and cost cutting targets are similar to those in last year Localisation for key components continues to remain the key focus areas for most OEMs
ICRA LIMITED
29%
40%
31%27%
43%
22% 28%
26% 23%25%
9%3%
1%
0%
10%
20%
30%
40%
50%
80,000
100,000
120,000
140,000
160,000
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct
-10
No
v-1
0
De
c-1
0
Jan
-11
Feb
-11
Mar
-11
Ap
r-1
1
May
-11
Jun
-11
Domestic Mini & Compact Car Sales YOY Growth (%)
Segment-wise Trends: Small Car Segment
Chart 3: Trend in Domestic Small Car Sales
Source: SIAM, ICRA’s Estimates ; Note – Small cars include mini + compact segment
Table 4: Trend in Market Share in the Small Car Segment
Growth momentum weakening on a sequential basis; competitive pressure likely to increase going forward on back of new launches After posting consistently strong growth over the past 24 months, the
small car segment, which accounts for over 80% of domesitc car volumes, started witnessing slowdown from April 2011 onwards. During Q1 FY12, the small car segment has grown by only 4.3% on YoY basis as compared
to 29.7% in FY11. The impact of rising interest rates and fuel price hike has affected
consumer sentiment particularly in the middle income group segment, resulting in slowdown in the small car segment
New small car launches by foreign OEMs have met with initial success and have eaten into the market share of incumbents- combined market share of top three players in this segment has declined from 91.8% in FY10 to
85.8% in FY11 and 84.1% in Q1 FY12. Also from July onwards, Maruti stopped production of Swift which has impacted volumes in July.
Competitive intensity in this segment is expected to increase further with the recent launch of Toyota Etios Liva and Chevrolet Beat Deisel, along with host of new launches slated over the short term – Maruti Cervo (Q2
2011), Honda Brio ( Q3 2011) Renault Small Car (early 2012), Fiat Small Car (early 2012)
Small car segment is also witnessing polarization and widening of price range with growth in sub 1000cc cars on one end (Nano, Alto, upcoming Cervo etc) and relatively higher end and feature packed offerings on the
other (Fabia, Polo, i20 etc.)
New model launches are gaining traction in the small segment
ICRA LIMITED
40%
29%
45%48%
24%
17%
37%
30%24% 26%
33% 32%
7%
0%
10%
20%
30%
40%
50%
60%
20,000
25,000
30,000
35,000
40,000
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct
-10
No
v-1
0
De
c-1
0
Jan
-11
Feb
-11
Mar
-11
Ap
r-1
1
May
-11
Jun
-11
Domestic Mid-Size Car Sales YOY Growth
Segment-wise Trends: Mid-Size Segment
Chart 4: Trend in Car Sales in the Mid-Size Segment
Source: SIAM, ICRA’s Estimates
Table 5: Trend in Market Share in the Mid-Size Car Segment
Note – Q1 FY11 & Q2 FY12 market share adjusted for change in SIAM Classification
Mid-Size segment performed better than small cars on back of new launches… Contrary to the weak performance of the small car segment, the mid-size segment has so far been insulated by the slowing demand, registering a 24% growth in Q1 FY12 over the same period in the last fiscal. Multiple
launches and competitive pricing have been some of the factors driving growth in this segment
The mid-size segment accounts for ~20% of the domestic car sales and has been growing at a fast pace driven by rising disposable income levels in the middle income group population and new model launches
Most OEMs have adopted a strategy to launch a notchback versions of their hatchbacks, which has been well accepted by the market
Helping OEMs gain market share With favourable market response for some of the new launches, Toyota, Volkswagen and Hyundai gained market share from incumbents in the
mid-segment While Maruti retained its leading position, its market share was affected
by production disruption during Q1 FY12, impacting the sales of Swift Dzire, the largest selling model in this segment. Apart from weak demand of Indigo family, sharp decline in Tata Motors market share in this
segment also reflects the impact of shift of Indigo CS to the compact segment, which was earlier classified under mid-size segment.
Competitive pressures in the midsize car space are likely to intensify as reflected by price cuts by some of the OEMs and expected launches in this segment. Skoda’s Rapid and sedan versions of Nissan’s Micra and Honda’s
new launch Brio are some of the new model launches expected in this segment
ICRA LIMITED
24% 26%32%
20%0%
-8% -6%
6% 6% -4%10%
-15% -6%
-20%
-10%
0%
10%
20%
30%
40%
0
1,000
2,000
3,000
4,000
5,000
6,000
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct
-10
No
v-1
0
De
c-1
0
Jan
-11
Feb
-11
Mar
-11
Ap
r-1
1
May
-11
Jun
-11
Domestic Executive Car Sales YOY Growth (%)
Segment-wise Trends: Executive Segment
Chart 5: Trend in Car Sales in the Executive Segment
Source: SIAM, ICRA’s Estimates
Table 6: Trend in Market Share in the Executive Segment
Executive segment impacted the most by slowdown During Q1 FY12, the executive segment posted the weakest performance
amongst other car segments. Domestic sale volumes shrunk by 4.3% on YoY basis. Over a longer period, as domestic PV industry matures, the contribution from this segment expected to increase which is currently low at around 2.5% GM continues to gain market share in the executive segment In the executive segment, General Motors continues to gain market share on back of the success of Chevrolet Cruze. Toyota reported some drop in market share in Q1 FY12 partly affected by production cuts consequent to earthquake in Japan Renault and Maruti are recent segment entrants with launch of Fluence and Kizashi respectively. Ability of these OEMs to garner sizable market share remains to be seen
ICRA LIMITED
Segment-wise Trends: Premium & Luxury Segment
Chart 6: Trend in Car Sales in the Premium and Luxury Segment
Source: SIAM, ICRA’s Estimates
Table 7: Trend in Market Share in the Premium and Luxury Segment
Growth in Premium and Luxury remains unabated The premium & luxury segment continues to remain unaffected by the slowdown, registering a growth of 23.0% during Q1 FY12. Consumers’ price
inelasticity towards rising interest rates, fuel price hikes coupled with low-base enabled the segment to post double growth during the last fiscal.
The growth in the premium & luxury segment continues to remain strong despite increase in vehicle prices on account of hike in custom duty (from 10% to 30%) on pre-assembled parts such as engines and transmission
systems, which are now excluded from the definition of CKDs. While some players are pursuing plans to assemble pre-assembled parts at their local facilities, others have absorbed the hike in duties to remain competitive
Partcipants maintain their market position The premium & luxury segment of the domestic car market continues to be well shared by leading German OEMs with top four players accounting for almost 90% of the volumes
44% 38%31%
63% 38%35%
33%65% 77%
17% 6%
23%
27% 21% 21%
0%10%20%30%40%50%60%70%80%90%
0
500
1,000
1,500
2,000
Ap
r-1
0
May
-10
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct
-10
No
v-1
0
De
c-1
0
Jan
-11
Feb
-11
Mar
-11
Ap
r-1
1
May
-11
Jun
-11
Domestic Premium & Luxury Car Sales YOY Growth
ICRA LIMITED
17%
19%
17%13%
28%
9%
24%19%
12%
12%
6% 5% 4%
0%
5%
10%
15%
20%
25%
30%
20,000
24,000
28,000
32,000
36,000
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct
-10
No
v-1
0
De
c-1
0
Jan
-11
Feb
-11
Mar
-11
Ap
r-1
1
May
-11
Jun
-11
Domestic UV Sales YOY Growth (%)
Segment-wise Trends: Utility Vehicles (UVs)
Chart 7: Trend in Sales in the Utility Vehicles Segment
Utility Vehicles also facing demand slowdown; premium segment remains insulated In line with broader trend, the UV segment also faced moderation in growth during the quarter. Apart from macro-economic headwinds, production cuts at Toyota’s plant due to shortage of components from Japan also impacted
volumes to an extent. The premium-end of the UV segment bucked the trend and continued to witness steady growth (up 22.6% on YoY basis) on back of low-base and relatively lower impact of weakening consumer
sentiment on rising interest rates and fuel price hike We expect the UV segment to largely grow in line with the overall passenger
vehicle market with growth being stronger in the lower and upper-end of the segment. A sizeable part of the UV market also caters to the people mover segment, which has also been one of the growth drivers striving on
demand from growing IT/ITES sector. In this segment, the industry is witnessing an increasing trend prefernce towards smaller MUVs such as Maruti’s Eeco. While Tata Motors has recently entered this segment with
Venture, other players are also expected to introduce vehicles in this semgent
M&M continues to dominate the UV segment In line with the car segment, top three players continue to dominate the UV segment with cumulative market share in excess of 85%. During Q1 FY12, M&M improved its market share driven by steady growth in Bolero & Xylo
volumes In the premium segment, BMW gained market share on back of success of
X1, its entry level offering in the SUV segment. We expect competitive pressures to increase in the premium segment as both Tata Motors and M&M are in the midst of introducting offerings from their foreign
acquisitions. While Land Rover Evoque, an entry level SUV is expected to be launched soon, M&M is also planning to bring Ssanyong’s Kornado in India
ICRA LIMITED
29%
11%
-2%3%
-7%
-11%
3%
-23%
0%
-15%
19%
27%
13%
3%
20%
-30%
-20%
-10%
0%
10%
20%
30%
40%
25,000
30,000
35,000
40,000
45,000
50,000
55,000
Ap
r-1
0
May
-10
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct
-10
No
v-1
0
De
c-1
0
Jan
-11
Feb
-11
Mar
-11
Ap
r-1
1
May
-11
Jun
-11
Passenger Vehicle Exports YOY Growth (%)
Segment-wise Trends: Exports Segment
Chart 8: Trend in Export Volumes
Source: SIAM, ICRA’s Estimates
Table 9: Trend in Market Share in the Exports Segment
FY10 Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY11 FY11 Q1 FY12
Hyundai 64.0% 57.2% 58.7% 46.5% 43.9% 51.2% 48.6%
Maruti 33.1% 37.3% 33.1% 28.1% 24.2% 30.4% 25.3%
Nissan 0.0% 0.0% 1.4% 19.2% 26.6% 12.5% 18.4%
Ford 0.3% 1.3% 2.6% 3.5% 3.2% 2.7% 4.4%
Tata 1.5% 2.3% 2.3% 1.7% 0.9% 1.8% 1.8%
Others 1.1% 1.8% 1.8% 1.0% 1.1% 1.4% 1.5%
Source: SIAM, ICRA’s Estimates
Export volume expected to moderate in the coming quarters During Q1 FY12, India’s export volumes grew by 12.3% on YoY basis. Growth was primarily driven by scale up in Nissan’ Micra and Ford’s Figo overseas sales. Both Maruti Suzuki and Hyundai, leading players in the export
segment witnessed a decline during the same period. Overall, small cars continue to dominate the export volumes with a share of
over 90%. Europe is the major export destination for India. With weak economic recovery in most European countries and discontinuation of scrappage incentive schemes, the demand from European region has been
gradually slowing down. While we expect export volumes to remain rather subdued in the near term
given the macro-economic headwinds in export markets, we believe long-term potential remains strong given India’s capabilities in low-cost manufacturing, favourable Government policies, and improving component
supply base
Nissan Micra exports pushed volumes during Q1FY12 While Hyundai and Maruti Suzuki are leading exporters, accounting for almost 90% of export volumes, other global players who have recently marked their presence in India are also pursuing opportunity to set-up India
as their manufacturing hub. Among them, Nissan and Ford are increasingly ramping up production to cater to export demand.
In the recent quarters, Hyundai’s export market share loss has largely been on account of diverting production towards the domestic market. Nissan has gained market share on back of scale up in Micra exports.
Chart 9: Trend in Operating Income & Margins of Maruti Suzuki
Source: Company Releases, ICRA’s Estimates
Key Highlights of MSIL’s Q1 FY12 Conference Call
Q4 FY11 Q1 FY11 Q1 FY12 YoY (%) QoQ (%)
Domestic 312,389 242,887 250,683 3.2% -19.8%
Exports 30,951 40,437 30,843 -23.7% -0.3%
Total 343,340 283,324 281,526 -0.6% -18.0%
Source: Company
Maintained margins even in a tough quarter MSIL’s operating income grew by 2.6% on YoY basis in Q1FY12 driven 4.0% improvement in realisations even as volumes declined by 0.6% during the quarter. Driven by weakening underlying demand and shutdown at Manesar, the company’s domestic volumes grew marginally by 3.2% during the quarter, while export sales declined on back of slowdown in demand from European markets Despite rising input material prices, the company maintained its OPBDIT margins at 9.5% on YoY basis driven by cost containment measures; improvement in realisations (price hike & impact of higher diesel car sales), lower royalty outgo and selling & distribution spend The company’s net profit grew by 18.0% to Rs. 549 crore on back of
higher non-operating income
Rising interest rates and fuel price hike are the key factors impacting vehicle
demand; although enquiry levels have been rising but conversion ratio have slowed down
Expect market condition to remain sluggish and pick up from festive season
Discounts have been higher on YoY basis but have declined on QoQ basis; management expects the discount levels to increase going forward given the competitive pressures
Slowdown in middle income level group is highest; sales in Northern region have been impacted the most, South & East are stable, while West has performed well
Post de-regulation in fuel prices, the company has witnessed ~50% increase in
sales of CNG driven cars; penetration levels (on model basis) stand at 25-30% The company is expanding capacity for diesel cars from 250,000 to 290,000 units
over the next two months
In Maruti’s overall sales mix, first-time buyers account for 47% of sales, additional car buyers (28%) and replacement segment accounts for 25%
New Swift is expected to be launched in August; initial response has been
encouraging with the company receiving 30,000 bookings
Table 10: MSIL’s volume break-up
ICRA LIMITED
200
250
300
350
400
450
500
550
600
Jun
-09
Au
g-0
9
Oct
-09
De
c-0
9
Feb
-10
Ap
r-1
0
Jun
-10
Au
g-1
0
Oct
-10
De
c-1
0
Feb
-11
Ap
r-1
1
Jun
-11
Trend in Key Commodity Prices - Steel Billets
Steel Billet Prices (in US$)
1,000
1,250
1,500
1,750
2,000
2,250
2,500
2,750
3,000
Jun
-09
Au
g-0
9
Oct
-09
De
c-0
9
Feb
-10
Ap
r-1
0
Jun
-10
Au
g-1
0
Oct
-10
De
c-1
0
Feb
-11
Ap
r-1
1
Jun
-11
Trend in Key Commodity Prices - LME Aluminium
LME Aluminium Prices (in US$)
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
Jun
-09
Au
g-0
9
Oct
-09
De
c-0
9
Feb
-10
Ap
r-1
0
Jun
-10
Au
g-1
0
Oct
-10
De
c-1
0
Feb
-11
Ap
r-1
1
Jun
-11
Trend in Key Commodity Prices - LME Copper
LME Copper Prices (in US$)
400
600
800
1,000
1,200
1,400
1,600
1,800
Jun
-09
Au
g-0
9
Oct
-09
De
c-0
9
Feb
-10
Ap
r-1
0
Jun
-10
Au
g-1
0
Oct
-10
De
c-1
0
Feb
-11
Ap
r-1
1
Jun
-11
Trend in Key Commodity Prices - Rubber
Malaysian Rubber Board Prices (in US$)
Annexure Commodity prices have started easing off…
Source: Bloomberg
Commodity prices have started easing off; most metal prices have declined by 5-10% from their peak levels (in last two years)
Rubber prices are also down almost ~20% from their peak levels
ICRA LIMITED
Annexure ICRA’s Ratings in Passenger Vehicle Sectors Analysts Contacts
Company Name Long-Term
Rating
Outlook Short-Term
Rating
Last Rating
Action
Analysts Contacts
Tata Motors Limited LAA- Stable A1+ January 2011 Mumbai
Mahindra & Mahindra LAA+ Stable A1+ January 2011 Subrata Ray [email protected] 022 – 3047 0027
General Motors LBBB+ Stable A2+ October 2010 Kinjal Shah [email protected] 022 – 3047 0027
Contents may be used freely with due acknowledgement to ICRA.
All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that
the information herein is true, such information is provided 'as is' without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or
implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion, and ICRA
shall not be liable for any losses incurred by users from any use of this publication or its contents.
