Companies & Sectors
Two-wheeler industry's domestic volumes to remain flat in FY14

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.

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Auto sales: Not very exciting festival season so far says Nomura

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.

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RCom offers iPhone 5C for Rs2,599 under two-year contract

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.

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COMMENTS

Jerin Chacko

4 years ago

Though it is a most interesting offer, the entire amount for two years is reflected on the Credit limit of the card holder and monthly payments are raised on the card statement. So it basically serves to restrict the customer from using her card for two whole years because of a laughably low credit limit.

REPLY

Jerin Chacko

In Reply to Jerin Chacko 4 years ago

Perhaps a more profitable option would be to buy the phone itself online or from a good retailer and pay EMI's on your own credit card. Then use your existing SIM card!

Madhu Menon

4 years ago

It's not a "contract" scheme at all. It's just a straight-up credit card EMI scheme. The entire amount gets blocked on your card and you don't get any subsidised price on the phone.

REPLY

MDT

In Reply to Madhu Menon 4 years ago

Thanks for your comment.
It is a two-year contract with RCom, during which the buyer cannot change operator. RCom has roped in credit card providers to cut the risk of non-payment by buyer. Also if you consider the EMI for 24 months, it comes out to be about Rs18000 more than the current market price of iPhone 5c. But thats the price, one has to pay to enjoy unlimited calls, data along with the latest gadget without any downpayment.

Madhu Menon

In Reply to MDT 4 years ago

On the facts first.

You are mistaken about not being able to change operators. Reliance's own FAQ (see Q5) says you can.

http://www.rcom.co.in/iPhone/iPhone5c/fa...

Next, the way "contract" works in USA is that your phone comes at a subsidised cost from the operator for a lock-in for a set time. For instance, it's available at $99 for a two-year lock-in.
http://allthingsd.com/intromessage/

Instead in India, it's being sold at full price and the only real carrot is the 18K for two years of usage from Reliance, which has has its downside as well. If you change operators because of Reliance service, you lose all the money you paid.

This article has a lot more detail.
http://capitalmind.in/2013/11/is-the-rel...

Madhu Menon

In Reply to Madhu Menon 4 years ago

Sorry, that link should've been.

http://allthingsd.com/20130910/apples-ip...

MDT

In Reply to Madhu Menon 4 years ago

Thanks for your comment and valuable inputs. When the article was written, the FAQs were not available. Anyway.
On changing operator, we request you to read the fine print. RCom states: "...you can move to any operator subject to MNP clearance".
This is the key....RCom may even ask the buyer to pay full amount (for MNP clearance) if she choses to go for MNP!
And you are bang on the 'carrot' part!! :-)

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