Sector Update | 22 February 2018
PV volume momentum intact
Growth driven by compact UVs, compact car and compact sedan segment
We analyzed the brand-wise data for the domestic PV industry. PV industry
volume momentum continued with ~8% growth FY18YTD, driven by compact UVs,
compact sedan and compact car segments grew 28.5%, 7.5% and 7.4% YoY,
respectively. However, the mini segment declined 1.6%, and the mid-size and UV-2
segments grew just 1% and 0.4% YoY, respectively. Key highlights:
Premiumization trend continues with share of product priced >INR800k
increasing to ~43% of domestic PV volumes (v/s ~41% in FY17).
MSIL’s market share has corrected in last couple of month to ~49% now (partly
impacted by old Swift phase-out), with FY18YTD share at ~50%. Baleno ramp-
up continues with record volumes of 17.7k units (+70% YoY) while Ignis
recording all-time high volumes of ~5.4k units (+13% YoY).
sales recovered sharply post adverse GST rate on hybrids, with monthly
volumes are back at 5.1k units, enabling it to partially regain lost market share
in the mid-size segment (29.5% in January 2018).
TTMT’s PV volume growth of 18.2% YoY in YTDFY18 was led by new products,
which grew 145% YoY, despite phasing out of old models (decline of
~52%).TTMT’s market share recovery continues with ~7.7% market share in
Jan-18 (v/s 5.7% market share in FY17).
While M&M is witnessing good growth for Bolero (~33% YTD) and Scorpio
(~9% YTD) benefitting from rural recovery, it market share loss continues with
UV market share at ~25.4% in FY18YTD (v/s ~29.4% in FY17; ~26.2% in Jan-18).
Record Baleno and Ignis dispatches drive MSIL’s market share in compact segment
MSIL’s compact segment volumes grew 23.3% YoY in YTDFY18, primarily led by
volumes grew 64% YoY in YTDFY18 to an average of 15.8k units per
month (v/s 9.8k units in YTDFY17). In January 2018,
volumes came in at a
record 17.8k units.
volumes grew 13.3% YoY in January 2018 to a record 5.5k units.
Consequently, MSIL’s market share in the compact segment has increased by
7pp to 52% in YTDFY18 (v/s 45% in YTDFY17).
Growth in other compact models like
remained muted at 0.3%
YoY each. With the launch of new
its volumes are expected to increase
gradually – already has bookings of 40k units. Inventory build-up due to this is
visible in dispatches of 14.2k units in January against 11.8k units in December.
Good initial response to MSIL’s
(facelift) also helped volumes to average
~3,750 units/month since the October 2017 launch.
volumes back to 5k units; regains some market share lost to Honda
GST impact on mild hybrid models has been partially offset by rise in sale of
petrol variants. As a result of the same,
volumes had witnessed limited
impact post increase in tax under GST.
MD and CEO,
Maruti Suzuki, said:
“Simply looking at the model-
wise sales, still Alto is number
one! Other bigger size vehicles
are becoming popular and the
first time customers are
directly buying the Dzire, Swift
or the Baleno. Still there are
customers who prefer small
cars and we have to take care
of those people. Some
customers are directly buying
the Swift or the Dzire but some
are upgrading from Alto,
Wagon R to Swift and Dzire or
Ciaz. We have these kind of
customers and have to take
care of them.”
Jinesh Gandhi – Research Analyst
(Jinesh@MotilalOswal.com); +91 22 3982 5416
(deep.shah@MotilalOswal.com); 6129 1533 |
(suneeta.kamath@MotilalOswal.com); 6129 1534
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
21 February 2018
are advised to refer through important disclosures made at the last page of the Research Report.