Sales of top 10 auto brands unfazed by demonetisation

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As automobile industry came to terms with the aftereffects of demonetisation, 10 passenger car brands including the likes of Maruti Suzuki’s Swift, Hyundai’s Elite i20 and Renault’s Kwid showed resilience in November and December.

While 74 passenger car brands compete for the consumer’s attention in Indian market, it is only the top 10 brands that matter. They account for 67.3 percent of volumes in the passenger car segment.

Interestingly, 70 percent of the top 10 brands by volumes belong Maruti Suzuki. The automaker has steadily increased its market share on the back of new launches. Both the Vitara Brezza and Baleno continue to enjoy strong demand. Passenger vehicles from the Renault and Hyundai stables — Kwid and Creta, respectively — also managed to fare better in the month of December.

For instance, Renault sold 8,797 units of Kwid in the last month, against 6,888 units clocked in December 2015. Similarly, Maruti Suzuki Swift saw a monthly run rate of 14,000 units in November and December 2016 — comparable to the figures notched up in the year-ago period. Hyundai’s Grand i10 also held onto its market share compared to the corresponding period last year. Ageing models like WagonR and Alto did, however, lose market share.

According to ICICI Securities, wholesale volumes in December clearly demonstrated the strength of brands. “Strong brands like Vitara Brezza, Kwid, Innova, Classic 350 volumes have done well despite the surrounding gloom. Ageing brands Alto and Wagon R have all seen market share decline, which has been offset by the Baleno and Vitara Brezza,” the brokerage said.

Maruti Suzuki’s volumes are expected to rise 12 percent CAGR over FY17-19 driven largely by a strong product pipeline. While January and February volumes are crucial, Emkay Global expects double-digit volume growth on strong new model pipeline, easing of capacity constraints and demand normalisation. Bookings which had gone down by 20 percent post demonetisation, have now recovered and are up 6-7 percent YoY in the month of December 2017. Rural growth too is strong at 14 percent year-to-date.

In the two-wheeler segment, Activa from Honda Motorcycles and Scooters Limited stable overtook volumes of Splendor. Activa’s market share remains above 50 percent in the scooters segment. TVS Jupiter comes a close second in the scooters segment. Despite the launch of Maestro and Duet, Hero Moto Corp’s market share has increased modestly. Motorcycles have been worst hit by the demonetisation and may take longer to recover.