FADA Journal - May 2017

COMMERCIAL VEHICLE SALES - APRIL 2017

Domestic Sales Apr-17 Apr-16 Growth Y-o-Y (%) Exports Apr-17 Apr-16 Growth Y-o-Y (%)
-
OEM 10 - OEM 682 668 2.10
AMW Motor 6,408 13 27 -51.85
Ashok Leyland 1,326 9,514 -32.65 Ashok Leyland 767 -60.65
Force Motors Force Motors 36 1,949 -34.55
Isuzu Motors 164 1,571 -15.60 Mahindra 1 55 -95.00
Mahindra 15,066 Maruti Suzuki 33 20 -19.51
Maruti Suzuki 4 4,000.00 Piaggio Vehicles 41 -40.89
Piaggio Vehicles 411 SML Isuzu 2,031 -27.15
SML Isuzu 12 12,947 16.37 Tata Motors 499 3,436
Tata Motors VECVs - Eicher 685 -40.97
VECVs - Eicher 735 4,062
VECVs - Volvo 14,778 Total 6,881
Total
2,578 --
12
379 -96.83 M&HCVs (Domestic Sales + Exports)
41,490
1,363 -46.07 Category Apr-17 Apr-16 Growth Y-o-Y (%)
Passenger Carriers 3,198
Goods Carriers 9,644 4,252 -24.79

23,367 -36.76 21,883 -55.93

4,641 -44.45 Total M&HCVs 12,842 26,135 -50.86

39 -69.23 LCVs (Domestic Sales + Exports)
53,835 -22.93
Category Apr-17 Apr-16 Growth Y-o-Y (%)

Domestic Sales + Exports Passenger Carriers 3,540 4,955 -28.56
Goods Carriers 29,170 29,626 -1.54
OEM Apr-17 Apr-16 Growth Y-o-Y (%)
10 - Total LCVs 32,710 34,581 -5.41

AMW Motor -

Ashok Leyland 7,090 10,182 -30.37

Force Motors 1,339 1,598 -16.21

Isuzu Motors 164 4 4,000.00

Mahindra 15,833 14,896 6.29

Maruti Suzuki 447 55 -
399 -96.74
Piaggio Vehicles 13

SML Isuzu 768 1,404 -45.30
26,803 -37.29
Tata Motors 16,809 -42.23 Segment wise (Domestic Sales + Exports)
5,326 -69.23
VECVs - Eicher 3,077 39 -24.98 Category Apr-17 Apr-16 Growth Y-o-Y (%)
12,842 26,135 -50.86
VECVs - Volvo 12 60,716 M&HCVs 32,710 34,581 -5.41
LCVs

Total 45,552 Total 45,552 60,716 -24.98

Source: SIAM

May 2017 52

THREE-WHEELER SALES - APRIL 2017

Domestic Sales Apr-17 Apr-16 Growth Y-o-Y (%) Exports Apr-17 Apr-16 Growth Y-o-Y (%)
2,202 300
OEM 15,957 1,116 97.31 OEM 126 138.10
Atul Auto 3,438 Atul Auto 19,867
Bajaj Auto 10,255 25,700 -37.91 Bajaj Auto 140 12,299 61.53
Mahindra - Force Motors 256
Piaggio 4,736 3,755 -8.44 Mahindra 182 -23.08
Scooters India Piaggio 1,124
TVS Motor 36,588 12,480 -17.83 TVS Motor 567 --

Total 544 - Total 22,254 1,832 -38.65

1,050 351.05 3,696 -84.66

44,645 -18.05 18,135 22.71

Domestic Sales + Exports

OEM Apr-17 Apr-16 Growth Y-o-Y (%)

Atul Auto 2,502 1,242 101.45

Bajaj Auto 35,824 37,999 -5.72

Force Motors 140 182 -23.08

Mahindra 3,694 3,755 -1.62 Segment wise (Domestic Sales + Exports)

Piaggio 11,379 14,312 -20.49 Category Apr-17 Apr-16 Growth Y-o-Y (%)

Scooters India - 544 - Passenger Carrier 50,779 54,917 -7.54
Goods Carrier 8,063 7,863 2.54
TVS Motor 5,303 4,746 11.74

Total 58,842 62,780 -6.27 Total 58,842 62,780 -6.27

TOTAL VEHICLE SALES SUMMARY (DOMESTIC SALES + EXPORTS) - APRIL 2017

CATEGORY Apr-17 Apr-16 Growth Y-o-Y (%)

PASSENGER VEHICLES 338,289 295,695 14.40
TWO-WHEELERS 1,906,448 1,725,764 10.47
COMMERCIAL VEHICLES -24.98
THREE-WHEELERS 45,552 60,716 -6.27
QUADRICYCLES 58,842 62,780 -79.25

TOTAL 44 212 9.51

2,349,175 2,145,167

Source: SIAM

TRACTOR SALES - APRIL 2017

SALES Apr-17 Apr-16 Growth Y-o-Y (%)

Domestic Sales 54,917 46,031 19.30
Exports 5,216 5,265 -0.93
Total (Domestic + Exports) 17.23
60,133 51,296

Source: TMA

53 May 2017



55 May 2017

NADA Musings

US Used-Car Glut Is A Dealer’s Dream, Automakers’ Nightmare

Three years ago, if a customer walked onto Dan Reel's used Demand for new vehicles is slowing after seven consecutive
car lot seeking a late-model off-lease Ford Escape, his answer years of rising sales. Meanwhile, carmakers' discounts on new
was short: tough luck. vehicles have surpassed record levels set during the Great
The supply of lightly-used cars and trucks was tight because Recession. Those discounts have been averaging over 10
automakers had drastically cut back on bargain leases during percent of a new vehicle's average selling price.
and after the Great Recession. Slumping prices also hurt automakers' in-house lenders. They
Recently, though, a computer search for available used vehicles price leases using a car's "residual value" - an estimate of the
within 150 miles of Reel revealed an eye-popping figure: 668 vehicle's worth after its lease ends. If that value is lower than
Escapes. That's enough to put more than 40 percent of the expected when the vehicle is resold, profits suffer.
inhabitants of this small northeastern Ohio town, population That risk was highlighted last November when Ford lowered
1,600, into the popular crossover. its financial service arm's pretax profit forecast by $300 million,
A search for the Chevrolet Equinox, a comparable crossover, citing falling resale values for off-lease vehicles.
showed 461 available. Still, carmakers show no sign of abandoning leasing. In the
"The automakers have flooded the market," said Reel, owner first quarter, leases made up 31.06 per cent of sales to
of Reel’s Auto in Orwell, Ohio, about 40 miles east of Cleveland. consumers, just below the record set in the second quarter of
That deluge is good news for used-car dealers, auto auction 2016 of 31.44 per cent, according to data from Experian.
houses and car buyers, who stand to benefit from a bountiful Automakers contend there is little cause for alarm. In late April,
supply of high quality, off-lease vehicles rolling into the US GM Chief Financial Officer Chuck Stevens said off-lease vehicles
market. were "an issue," but insisted that "overall the used-car market
By the end of 2019, an estimated 12 million low-mileage is absorbing that supply."
vehicles are coming off leases inked during a 2014-2016 spurt COOKIE CUTTER VS UNICORN
in new auto sales, according to estimates by Atlanta-based In a market teeming with product, attention is now on auction
auto auction firm Manheim and Reuters. sites, a critical link in the used-car food chain. The US trade is
That's helping independent dealers such as Reel, who can turn dominated by Manheim and Adesa, a unit of KAR. These
a quick profit on vehicles bought cheaply from auction companies re-sell cars and trucks returned to automakers from
companies. rental car companies and consumer leases.
Big players like AutoNation also aim to benefit from selling Franchise dealerships get first dibs on inventory. The leftovers
late-model vehicles at a discount versus brand new cars. are available to independent dealers through online and live
Consumers seeking great deals are in luck. Used-vehicle prices auctions.
at auction fell about 3 percent last year, according to Carmel, KAR's Hallett says the company makes money on the volume
Indiana-based KAR Auction Services Inc, which facilitated the of cars sold, so rising supply boosts business. Manufacturers
sale of 5.1 million used and salvaged vehicles in 2016. Used are also using more of KAR's ancillary repair and finishing
prices should drop around 3 percent annually for the next services to make vehicles look as good as possible for sale, he
couple of years, according to KAR's chief economist Tom said.
Kontos. Supply is currently so swollen Adesa now offers used dealers
General Motors Co. and Ford Motor Co. say prices for its used a guarantee: they can return any car they buy online within
vehicles, which consist largely of nearly-new ones coming off 30 days if it doesn't sell and only end up $50 out of pocket.
lease to consumers, fell 7 percent in the first quarter versus Used-car dealers are also tweaking their strategies for a glutted
the same period in 2016. GM says it expects a 7 percent decline market. Reel, the Ohio dealer, hunts for unique vehicles that
for 2017 compared to last year. can command a slight premium.
DETROIT THREE NOT CELEBRATING With used-car prices falling, the pressure is on dealers to sell
While many used-car dealers and their customers are spoiled vehicles fast before they lose value.
for choice, the glut bodes ill for GM, Ford and Fiat Chrysler Rather than keep too much inventory on his lot, Reel entices
Automobiles NV and is one reason the Detroit Three's share customers with the prospect of almost unlimited choice on
prices are stuck in neutral. the auction sites.

May 2017 56

NADA Musings

Discounted Cars Benefit Buyers, but May Spell Trouble for Industry

Big cash discounts are making a comeback in the US car will lower the price by $1,000 more for customers who
business. finance the truck through the dealership. Yet another
Now that sales of new cars and trucks are slowing down, discount of $1,250 is available if a customer can show he
automakers and their dealers are starting to lop thousands has a family member who leases a vehicle from a competing
of dollars off sticker prices — sometimes slashing the final manufacturer.
cost by a third — a sales tactic that helps consumers but has Many heavily discounted vehicles are not stripped-down,
led to industry troubles in the past. basic models, but fully loaded versions with all the bells and
Take the Nissan Altima, one of the country’s top-selling cars. whistles. Leckner Nissan has discounts of up to $10,000 off
Some dealers around the country are now offering the the price of several Murano SUVs equipped with navigation
midsize sedan for $6,000 to $8,000 below list prices. systems, heated seats, all-wheel drive and other features.
Sizable price cuts are being offered on the Hyundai Sonata, Luxury brands are also cutting prices but tend to offer smaller
the Chevrolet Malibu, the Ford Fusion and many other cash discounts and limit them to certain slow-selling models.
models. Consumers who hunt around can find deals on sedans like
“The market is slowing down and now inventories are the BMW 320, the Cadillac ATS and the Infiniti Q50, though.
building up, so the manufacturers are putting money out to To manage the flow of unsold cars, automakers can also
move these cars,” said Wes Lutz, owner of Extreme Dodge in change production levels. General Motors and Ford Motor
Jackson, Mich. have recently cut shifts at a handful of plants in the United
The hefty price cuts are the latest signs of difficulty in the States, for example. Fiat Chrysler has stopped making
auto industry. In April, sales declined 4.7 percent, to 1.4 compact and midsize cars altogether.
million cars and light trucks. Forecasters expect sales of about But these days, new cars rolling out of the factory also face
17.2 million vehicles in 2017, down from last year’s record increasing competition from used cars, an inventory that is
of 17.5 million. largely out of automakers’ control. Some 3.5 million vehicles
While that is still a healthy level, cash discounts are one of that were leased for the last two or three years will be
the first tactics automakers typically turn to when they feel returned and sold as gently used cars this year, and even
the need to lure more shoppers into new-car lots. more are coming in 2018.
The trouble is, big price cuts, if maintained for extended As the industry rebounded over the last seven years,
periods, can hurt automakers by eating into their profit automakers had been careful to limit pure cash discounts
margins and lowering the value of used cars. A decade ago, and try more subtle ways of offering deals. Sometimes they
offers of “cash on the hood” reached a frenzy when General give dealers discounts to allow them more leeway to
Motors offered employee pricing to all customers, and other negotiate prices with customers. Or they give dealers
automakers rushed to match the deal. Such discounting discounts tied to aggressive sales targets, a practice that
helped push the industry into crisis, and GM into bankruptcy. sometimes results in very little profit for dealers while
Lutz’s franchise is offering a gray 2017 Dodge Challenger preserving the manufacturer’s margins.
coupe for $27,900 — $6,680 under its list price — thanks to Automakers have also turned more heavily to leasing, and
an incentive program that Fiat Chrysler Automobiles ran in longer loans of 72 or 84 months, which keep the customer’s
April, allowing dealers to discount the price on certain monthly payment affordable.
models by up to 20 per cent. However, the situation may not be that bad, as most of the
“This is a great deal. Consumers win. Dealers win. I can sell a price cuts offered so far are limited to certain models, or
lot of cars if I have $7,000 discounts,” he said. “It’s not so certain regions of the country, as opposed to the big, across-
great for the manufacturers, though.” the-board campaigns of the last decade that applied to all
There appear to be few types of vehicles without discounts. vehicles in stock.
The trucks, SUVs and other roomy vehicles that Americans GM and Ford continue to rack up big profits, underpinning
favour these days are also being offered at bargain prices. that view. But troublesome signs are cropping up. Toyota
Bomnin Chevrolet in Miami is selling a white 2017 Colorado recently said it lost money in North America in the quarter
pickup truck for $19,281 — $4,854 below its sticker price. It that ended March 31, its first loss in the region in five years.
One of the reasons it cited: rising sales incentives

57 May 2017





RNI No. DELENG/2002/06878 Postal Regn No. DL (ND) - 11/6038/2015-16-17
Date of Publication: 23/24 Every Month Licence No. U (C)-259/2015-17
Posting at New Delhi PSO: 26-30 Every Month LICENCED TO POST WITHOUT PRE-PAYMENT