According to ICRA, motorcycles segment, which accounts for over 70% of two-wheeler industry volumes in India, remains the primary weak spot
Ratings agency ICRA Ltd, an associate of Moody's Investor Service said, it expect domestic volumes for two-wheelers to remain flat during FY2013-14 due to weakness in consumer sentiments.
"Like in the past, the onset of the festive season (this year a little earlier as compared to the last year) has brought about a sequential growth in volumes in September quarter, but the quantum of quarter-on-quarter (QoQ) growth at 1% remains much lower than the historical average of 6-7%, indicative of the weakness in consumer sentiment," the ratings agency said in a release.
According to ICRA, domestic two-wheeler industry had recorded sales volumes of 13.8 million units in 2012-13, a growth of 2.9% over the previous year. The motorcycles segment, which accounts for over 70% of industry volumes, remains the primary weak spot. In contrast, the scooters segment, which accounts for about 24% of industry volumes, has motored along at a brisk pace expanding by 16.6% during first half of 2013-14, it added.
Over the medium term however, ICRA said it expects the two-wheeler industry to report a volume CAGR of 8-9% to reach a size of 21-22 million units, including domestic and exports by 2016-17 even as its longer-term growth forecast remains at 9-11%.
"We believe the various structural positives associated with the domestic two-wheeler industry including favourable demographic profile, under developed public transport system, growing urbanization and strong replacement demand remain intact; as also the large opportunity of growth in overseas markets, mainly Africa and Latin America," the ratings agency added.
According to Nomura, the demand for autos during the festive season so far is not so great and dealers expect flat growth in October volumes
Auto sales in October 2013 is not exciting despite the festival season with car volumes likely to decline 8% to 10% while two-wheeler sales may witness about 10% growth, says Nomura Financial Advisory and Securities (India) Pvt Ltd.
"Our checks with dealers suggest that demand in the festival season has been largely flattish for two wheelers, below their expectations. Inventory levels are currently high at about 1.5 to two months, even with many dealers in rural areas. Even in four wheelers, volume growth is largely flattish in the festival season so far, as per our dealer checks. Further, discount levels continue to remain high for most original equipment manufacturers (OEMs)," Nomura said in a report.
As per the calculations of Nomura, car sales are likely to decline by 8% to 10% during October. It said, "Our dealer checks suggest that rural demand remains strong, which should continue to benefit rural-focussed players like Maruti Suzuki India Ltd (MSIL) and also Hyundai to some extent. We expect MSIL’s total domestic car volumes to decline by about 2% (passenger vehicle-PV volumes to decline by 7%) with the company will likely maintain its market share at around 50%."
In two-wheeler space, Nomura expect 10% growth in October led by strong sales in Honda Motorcycles and Scooters India Ltd (HMSI)'s about 30% volumes. It also expect Hero MoroCorp (HMCL) to report 12% growth in volumes driven by higher production in October to offset production losses at the company's Haridwar plant in September 2013. Bajaj Auto, on the other hand may report 11% lower sales in October, Nomura said.
According to the research note, volumes in the medium and heavy commercial vehicles (MHCV) segment are likely to decline by 28% to 30% in October. It expects Tata Motors and Ashok Leyland’s domestic sales to fall by 38% and 14%, respectively. In light commercial vehicle (LCV) space, Nomura expect the volumes to fall by 20% to 22%.
However, Nomura said despite the lower volumes in MHCV segment Tata Motors's growth outlook and profitability at Jaguar Land Rover (JLR) would remain strong and will more than offset the weakness in the domestic business.
RCom is offering unlimited voice calls, SMS and 3G data for a fixed monthly fee of Rs2,599 and Rs2,999 with a two-year contract for buyers of iPhone 5c and 5s
Reliance Communication Ltd (RCom) said it is offering Apple's new iPhone 5c and 5s at Rs2,599 and Rs2,999 per month under a two year contract. There is no down payment for both these handset with 16GB internal memory. This offer includes handset cost, unlimited local and STD calls, SMS’, national roaming and 3G data for 24 months.
"Under this unique offer, Apple iPhone 5c and iPhone 5s customers will not receive any usage bill for 24 months, as the monthly payments include all usage charges. Only international calls and international roaming charges will have to be paid for," the Anil Dhirubhai Ambani group company said in a release.
These types of lock-in offers are more popular in countries other than India, where telecom operators provide iPhone at subsidised rates, but with a contract. RCom is the first company of provide iPhone under such contract.
RCom has partnered with select credit card providers, like ICICI Bank and HDFC Bank. The company is also offering special mobile number portability (MNP) facility for corporates besides setting up priority helpline for its subscribers who use Apple mobiles.