Auto sales are dropping almost industry-wide, sure, but new launches seem to be boosting market-shares of some automakers at the expense of others.
Auto sales are dropping almost industry-wide, sure, but new launches seem to be boosting market-shares of some automakers at the expense of others.
Companies such as Maruti Suzuki, Honda Motorcycles and Scooters (HMSI), Honda Siel and Bajaj Auto have gained market shares in certain segments from vehicle makers such as General Motors, Ford, Tata Motors and Hero Motocorp (that have not had any new launches).
For instance, market leader Maruti, which entered the utility vehicle (UV) segment with the Ertiga, gained 5% market share from Tata and General Motors in May. Maruti received 45,000 bookings for the 7,000 units of the Ertiga it produced. Now, Maruti targets to sell 70,000 units a year.
In their client note on June 12, Binay Singh and Shreya Gaunekar, analysts with Morgan Stanley, wrote that Toyota also posted 123% on-year growth in May in the UV segment, thanks mainly to its new Innova and Fortuner which racked up sales volumes. M&M’s market share remained stable at 50% in the UV segment. Maruti’s market-share was up to 19% during the same month, while Tata Motors and GM lost 200 basis points (bps) each in market share on-month, they wrote.
In the car segment, Honda Siel gained 190 bps market share from Ford, GM and Hyundai on the back of the Brio and the new City whose production was affected due to floods in Thailand. Overall, Honda Siel sold 10,334 units in May 2012, including 4,512 units of the Brio and 3,753 units of the City, as against 2,334 units in May 2011.
“New launches do help in a situation like this,” said Jnaneswar Sen, senior vice president, sales and marketing, Honda Siel.
“We have gained incidental volumes from the Brio but our Jazz and the City are also selling well. However, the market is further expected to slow down with the increase in petrol prices,” said Sen.
Cars posted flattish growth in May as growth was hampered by continued weak macro factors and a hike in petrol prices. The A3 segment grew 37% versus negative growth posted by the A2 (entry-level hatchback) segment. The A3 segment growth was primarily from new launches such as the Nissan Sunny, Skoda Rapid and the Hyundai Verna.
A similar trend obtains in the two-wheeler segment. In May, HMSI and Bajaj Auto gained 100 bps market-share in the under-125 cc motorcycle segment which posted 7% growth after a 1% decline in growth in April. Growth was mainly driven by new launches, including HMSI’s Dream Yuga and Bajaj Auto’s Discover variant, wrote the Morgan Stanley analysts.
“In the past one year, new launches have helped the companies in gaining volumes and market-shares. Vehicles like Mahindra’s XUV 500, Maruti Suzuki’s Ertiga, DZire have fetched good volumes for the companies. In the passenger vehicle segment, it is very clear that the new products are influencing the market dynamics,” said Abhishek Banerjee, senior analyst at Asian Market Securities.
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