domestic car sales november tata motors hyundai honda renault kwid demonetisation modi govt car sales impact cash crunch
Morning traffic during heavy fog in New Delhi, December 1 2016 (representational image).Reuters

November wasn't a great month for automobile companies in India and it's common knowledge now that demonetisation dented their volumes. Honda took a huge hit; Hyundai and Ford also saw their domestic sales fall while Renualt India sustained its growth momentum. 

Honda Cars India
The company saw domestic sales plunge 45.4 percent to 8,029 cars in November as against 14,712 units sold last November. 

"The November month saw major disruptions in the market due to the on-going effects of demonetisation and cash crunch. The consumer sentiment was low and footfalls and enquiries at the dealerships also slowed down during the month," the company said in a statement.

Ford India
Domestic sales dropped 21 percent to 6,876 units from 8,773 cars last November, though exports rose sharply to 14,128 cars from 8,416 in November 2015.

"While the macro-economic indicators continue to be positive, the auto industry does face short-term headwinds given the recent demonetisation drive," Anurag Mehrotra, executive director, marketing, sales and service at Ford India, said in a statement.

The Indian arm of Korean manufacturer Hyundai sold 40,016 cars in India, down 8.3 percent from 43,651 units in November last year. Exports rose from 14,008 to 17,077 units, taking the cumulative volume sales to 57,093 units, marginally down from 57,659 cars sold in November 2015.

Renault India
The Indian subsidiary of French automaker Renault sold 9,604 cars in November this year, marking a growth of 23 percent over 7,819 units sold last November.

Overview by IDBI Capital Markets & Securities

  • In addition to the disruption caused by demonetisation, the festive season was 10-14 days earlier this year. This continued to play a role in November, as November'15 sales saw a low base effect. Across 2W/4W/CVs, sales in November 2015 were substantially lower than October 2015.
  • Among 2W players for the domestic market, TVS Motors once again had the best performance, with flattish performance powered by mopeds and scooters. Hero and Bajaj both saw sales slump, with Bajaj's exports doing badly on a slightly higher export base. HMSI saw flat sales with domestic sales down 4%.
  • With regards to domestic PV sales, Maruti's volumes grew a surprising 14% YoY and 1% MoM, shrugging off the demonetisation slump. M&M was far more negatively impacted with a 23% decline in sales. Tata Motors saw flat PV sales.
  • Commercial vehicles sales trend were mixed with AL reporting 7% growth while TAMO reported a 17% decline, with MoM numbers seeing an impact (24-30% down). However, given reports of cash-strapped trucking fleets postponing purchases and initial week sales dropping 80-90%, these wholesale numbers were encouraging.
  • Royal Enfield sales were largely immune from the demonetisation impact, with growth of 41% YoY (-3% down MoM). VECV fell 13% YoY (-30% MoM).