Post Q3 results, automakers positive about sector growth

Experts say that the Union budget announcements will give a boost to the economy especially the rural sector with a focus on infrastructure and creation of a robust business environment, thus helping auto industry and positively contribute to National GDP. Take the instance of Ford India, which continued its growth momentum in January with a steady rise in combined domestic sales and exports to 14,259 vehicles, up from 12,834 units in the same month a year ago. The company’s domestic sales in January grew to 7,995 vehicles against 7,045 units in the same month last year, while exports grew to 6,264 vehicles from 5,789 units in January 2016.

Anurag Mehrotra, Executive Director, Marketing, Sales & Service at Ford India says, “The industry continues to face short-term headwinds even as long-term outlook continues to be positive. The outlook is further strengthened by the government’s roadmap to boost rural economy, provide relief to personal income tax, and investment in further building the infrastructure. A timely implementation of GST is expected to make a significant positive impact on the economy while raising consumer sentiment in the months to come.”  

Ford in India manufactures and exports automobiles and engines made at its integrated manufacturing facility in Chennai, Tamil Nadu and Sanand, Gujarat. The company, also extended its sales and service network with the inauguration of its new dealerships Suryabala Ford in Coimbatore and Pollachi and Arun Ford in Nagpur. On the other end, South Korean Hyundai Motor India registered cumulative sales of 51,834 Units, which is a growth of 17.2% over last year. Domestic sales were pegged at 42,017 units and exports at 9,817 units with cumulative sales of 51,834 units for the month of January 2017. 

Rakesh Srivastava, Sr. Vice President - Sales & Marketing, HMIL, said “The year 2017 looks promising with the entire industry optimistically looking forward for a positive growth. Hyundai has shown all model growth of 17.2% on account of good performance by performer brands Grand i10, Elite i20, Creta and without any new mass model launches. The Union budget will give boost to economy especially rural with focus on infrastructure creating a robust business environment thus helping auto industry and positively contribute to National GDP.” 

As per the Automobiles report by Kotak Institutional Equities (dated Feb 1, 2017) passenger vehicle volumes recovered sharply last month. The industry is likely to have grown by double digits Y-o-Y. Most of the large OEMs have reported strong Y-o-Y growth in wholesale volumes. Hyundai reported 11% Y-o-Y growth in domestic volumes, Toyota volumes were up 21% Y-o-Y. Ford, Nissan, Renault and Tata Motors also reported double-digit Y-o-Y growth in volumes while Honda’s volumes continued to remain weak and declined by 9% Y-o-Y.