Auto monthly sales update - March 2013: Kotak Securities

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26 Aug, 2025 12:21

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Kotak Securities has come out with its report on auto sector. The research firm expects volumes to stay weak in the near term.
 
Auto volumes in the month of March 2013 were not very different from the trend that had been witnessed in the past few months. Overall weak economic growth continues to keep demand sentiment subdued. Most of the companies continue to report negative growth. Hero MotoCorp reported very weak set of dispatch figures. Tata Motors performance in LCV remained strong, but lagged in the M&HCV and passenger car segment. M&M continue to report positive growth in the auto business but tractor performance stayed subdued. TVS Motors too witnessed volume decline in March 2013. Given lack of near term trigger, we expect volumes to stay weak in the near term. Over the medium term, factors such as monsoon and economic recovery will play a key role in reviving demand sentiments. 

• HMC reported disappointing sales volumes for the month of March 2013.
• Wholesale dispatches in March 2013 were down by 11.4% to 468,283 units. On a sequential basis, the volumes declined by 6.6%. For the full year (FY13), HMC's volumes are down by 2.6%.
• General slowdown in demand and competitive pressure are leading to weak performance for HMC.
• Competitors are targeting the 100cc/125cc segment which has been the key growth driver for HMC for the past many years.
• Honda Motorcycles has taken an aggressive stance towards improving its presence in India. In FY13, HMSI gained market share from all the key players in the domestic circuit (including HMC).
• HMSI will continue with new launches and increasing touch points and that we believe will continue to hit Hero MotoCorp's domestic market share over the medium to long term.
• HMC is taking steps to augment its global presence and that we believe will be critical given that domestic performance is expected to face high competitive pressure. Hero MotoCorp has commenced its export operations to Africa, Latin and Central America.
   
  TVS MOTORS: 
• TVSM's March 2013 wholesale volumes came in at 167,583 units, a drop of 7.5% over March 2012 figure of 182,527 units. Over February 2013, volumes were up marginally.
• Domestic 2W volumes declined by 11% YoY in March 2013 to 143,239 units. Reason for decline in domestic volumes can be attributed to demand slowdown and inadequate new launches compared to competition.==   In the motorcycle space the company has been unable to improve its volumes despite the launch of Phoenix 125. In March 2013, motorcycle dispatches dipped by 6% YoY.
• Scooter volumes in March 2013 reflect TVSM's performance in this segment in FY13. Scooter dispatches in March 2013 dropped by 26% YoY to 29,261 units. Lack of new product and competitive intensity led to significant market share loss for TVSM in the scooter segment in FY13. In FY13 the company witnessed 17% drop in scooter volumes as against positive growth for the segment.
• Moped volumes at 71,438 units declined by 5% in March 2013. Share of mopeds in the overall 2W volumes increased from 37% in FY12 to 40% in FY13.
• 2W export volumes largely stayed weak in FY13 and in March 2013, the volumes declined marginally by 1% to 19,268 units.
• 3W volumes continued with the strong performance with dispatches in March 2013 rising by 125% to 5,076 units.
• TVSM's volumes in the near term are expected to remain under pressure. Over the medium to long term though, new launches, lower base and expected demand pick-up should aid volume growth.

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