October 2012

Dashboard
The Monthly Auto Update

Data Track: September 2012 volume update of auto majors Speedometer

 Sector overview and outlook ........................................................... 2 September 2012 relative performance
 Hero MotoCorp ................................................................................. 3
MOSL Auto Index Sens ex
 Bajaj Auto .......................................................................................... 4 116
 Maruti Suzuki .................................................................................... 6 112
 Mahindra & Mahindra ....................................................................... 8 108
 Tata Motors ...................................................................................... 10
104
 TVS Motor ........................................................................................ 12
100
Special Report 96
 INDIA AUTO: Channel checks .......................................................... 13 3-Sep 9-Sep 15-Sep 21-Sep 27-Sep
 Tata Motors: JLR momentum to sustain ......................................... 16
12-month relative performance
Sector Gauge: August update MOSL Auto Index Sens ex
 Two-wheelers ................................................................................. 19 136
 Three-wheelers .............................................................................. 21
122
 Cars and UVs .................................................................................... 23
 Commercial vehicles....................................................................... 25 108

News and Events ............................................................................... 28 94

 M&M launches Quanto (mini-SUV) at INR582k; receives 3,200 bookings 80

since launch Sep‐11 Dec‐11 Ma r‐12 Jun‐12 Sep‐12
 BharatBenz starts commercial sales of its heavy duty trucks in India
 All new Range Rover revealed at Paris Motor Show

Aggregate Volumes For September 2012*

Segment Sep-12 Sep-11 YoY (%) Aug-12 MoM (%) YTDFY13 YTDFY12 Chg (%)
2-Wheelers 885,193 1,136,523 -22.1 898,893 -1.5 5,870,111 6,181,553 -5.0
Motorcycl e 783,933 1,011,681 -22.5 801,826 -2.2 5,250,478 5,517,095 -4.8
3-Whe el e rs 55,891 57,459 -2.7 46,586 20.0 269,340 322,799 -16.6
Ca rs 106,446 108,442 -1.8 67,747 57.1 602,898 644,923 -6.5
UVs 51,268 40,058 28.0 48,596 5.5 288,032 201,872 42.7
Commercial Vehicles 64,952 61,472 5.7 58,901 10.3 338,842 319,975 5.9
LCV 41,024 33,282 23.3 36,789 11.5 214,698 173,829 23.5
M&HCV 23,928 28,190 -15.1 22,112 8.2 124,144 146,146 -15.1
Tra ctors 20,085 24,673 -18.6 13,234 51.8 109,418 117,546 -6.9
Total Volumes 1,183,835 1,428,627 -17.1 1,133,957 4.4 7,478,641 7,788,668 -4.0
* Aggrega te of Ba ja j Auto, He ro MotoCorp, TVS Motor, Ma ruti , M&M, Ta ta Motors a nd As hok Le yl a nd Source: Compa ny/MOSL

Comparative Valuation
CMP * Rating P/E (x) EV/EBITDA (x) RoE (%) RoCE (%)
(INR) FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E
Ba ja j Auto 1,784 Buy 16.6 18.0 14.3 12.1 12.5 9.6 56.7 43.3 44.5 73.0 60.0 61.2
Hero MotoCorp 1,850 Buy 15.5 17.1 14.9 10.0 10.4 8.5 55.4 41.8 39.7 52.4 45.7 50.4
M&M 870 Buy 17.0 13.6 11.1 10.5 8.5 7.6 23.0 21.7 19.3 23.1 24.3 22.7
Ma ruti Suzuki 1,364 Buy 23.5 20.3 14.4 12.7 9.2 6.4 10.8 10.5 13.2 13.2 12.4 15.9
Ta ta Motors 273 Buy 12.3 19.5 14.0 4.5 3.8 3.2 38.4 25.2 24.7 24.1 23.9 24.2
* Pri ce a s on 3 October 2012 Source: Compa ny/MOSL

Jinesh Gandhi (Jinesh@MotilalOswal.com); +91 22 3982 5416

Chirag Jain (Chirag.Jain@MotilalOswal.com); + 91 22 3982 5418
Investors are advised to refer through disclosures made at the end of the Research Report.
 Dashboard

Data Track Sector overview and outlook

Volume to remain under pressure, margin have bottomed out
n Slowdown visible across segments except UVs and LCVs: Slowdown earlier visible
in the M&HCVs, Cars and 3Ws segment is now evident in 2Ws as well with 4% YoY
drop in 2QFY13. However, growth in UVs (+29% YoY) and LCVs (+13% YoY) continue
to remain healthy. Our channels checks indicate that start to the festive season
have not been encouraging. Dealer inventory is high particularly in 2Ws and Cars
segment. Recent hike in diesel prices does not augur well for the CV segment.
Expected softening in interest rates and reform driven improvement in macro
environment and consumer sentiment, coupled with long term drivers remaining
intact are key drivers for volumes over next few years.
n Margins to bottom-out in FY12, with gradual improvement from 2HFY13 onwards:
EBITDA margins are estimated to improve in FY13, benefitting from price increases,
higher operating leverage and soft commodity prices. However, volatile Fx and
increasing competitive intensity in some segments would restrict pricing power.
We anticipate price increases coupled with productivity improvement programs
and high operating leverage to drive profitability from 2HFY13 onwards.
n Easing of macro headwinds to be key catalyst for demand recovery: Lending rates
are expected from near peak levels, auguring well PV and CV demand. Further,
higher fuel prices have been one of the key impediments to growth. Lastly,
appreciating INR also augurs well for Maruti Suzuki and Hero MotoCorp, but
negative for Bajaj Auto. However, softening in commodity prices would support
profitability. Easing of macro headwinds would be key driver for volume growth,
profitability and in-turn for re-rating of auto stocks.
n Valuation and view: Recent reform initiatives undertaken by the government
would help to improve consumer sentiment. This coupled with expected reduction
in interest rates, augurs well for pick-up in economic activity and in-turn demand
for automobile. Changing competitive landscape in the auto sector would be one
of the key determinants of stock performance. While we believe that worst of
competitive pressure is behind for passenger cars, increasing competitive intensity
for both 2W, UVs and CVs pose challenge to incumbent OEMs and near term
overhang on valuations. We prefer Tata Motors, Maruti Suzuki and Bajaj Auto.
Key Financial Indicators
Volume Chg (%) ^ EBITDA Margins (%) EPS (INR) * EPS Growth (%) *
FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E
Bajaj Auto 13.7 -2.1 12.8 19.0 18.0 19.3 107.4 99.3 124.3 18.8 -7.5 25.2
He ro MotoCorp 15.4 -2.6 12.5 11.0 10.1 11.1 119.1 108.0 124.1 18.4 -9.3 14.9
M&M 24.2 9.5 10.0 13.3 13.6 13.5 51.2 63.7 78.4 6.6 24.4 22.9
Ma ruti Suzuki -10.8 1.3 16.2 7.1 8.5 9.9 58.2 67.2 94.8 -29.4 15.5 41.1
Ta ta Motors * 10.3 1.5 15.0 14.3 13.7 14.2 37.8 33.2 41.3 38.5 -12.0 24.4
^ Vol ume growth for sta ndal one; * Cons ol i da ted wherever appl i cabl e, **Adjus te d ma rgi ns for change i n royal ty accounti ng
Comparative Valuation
CMP * Rating P/E (x) EV/EBITDA (x) RoE (%) RoCE (%)
(INR) FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E
Bajaj Auto 1,784 Buy 16.6 18.0 14.3 12.1 12.5 9.6 56.7 43.3 44.5 73.0 60.0 61.2
He ro MotoCorp 1,850 Buy 15.5 17.1 14.9 10.0 10.4 8.5 55.4 41.8 39.7 52.4 45.7 50.4
M&M 870 Buy 17.0 13.6 11.1 10.5 8.5 7.6 23.0 21.7 19.3 23.1 24.3 22.7
Ma ruti Suzuki 1,364 Buy 23.5 20.3 14.4 12.7 9.2 6.4 10.8 10.5 13.2 13.2 12.4 15.9
Tata Motors 273 Buy 12.3 19.5 14.0 4.5 3.8 3.2 38.4 25.2 24.7 24.1 23.9 24.2
* Pri ce a s on 3 October 2012 Source : Company/MOSL
October 2012 2
 Dashboard

Data Track Hero MotoCorp

Sep-12 volumes below est; 4th consecutive month of disappointment
Snapshot of volumes for September
Residual FY13 YTD
YoY MoM YoY Residual
Sep-12 Sep-11 Aug-12 YTDFY13 Chg (%) FY13E Monthly Monthly
(%) (%) (%) Gr. (%)
Run rate Run rate
Total volume 404,787 549,625 -26.4 443,801 -8.8 2,975,097 -3.2 6,073,823 -2.6 -2.0 516,454 495,850
Source: Compa ny/MOSL
Highlights
The disappointment in n Hero MotoCorp’s Sep-12 volumes de-grew 26.4% YoY (-8.8% MoM) to 404,787 (v/s
Sep-12 wholesale est 445,000). This is the fourth consecutive month of negative surprise. FY13YTD
volumes is reflection of volumes have declined by ~3.2%.
weak retail demand and n Our channel interaction indicates inventory levels of more than 6 weeks with
high channel inventory dealers. Considering the high channel inventory, we believe Hero MotoCorp has
build-up. limited scope to further build up inventory for the festive season. The
disappointment in Sep-12 wholesale volumes is reflection of weak retail demand
and high channel inventory build-up.
n Demand pick-up in festive season would be critical for achieving its 4-5% volume
growth guidance for FY13. However, initial signs of festive demand have not been
encouraging.
n HMCL has announced capacity addition of 2m units by 2QFY14. It is investing
INR25.75b on two plants (capacity of 0.75m at Rajasthan by 1QFY14 and 1.25m at
Gujarat by 2QFY14) and an R&D center. The company will be funding these
investments through internal accruals and cash of ~INR40b as at March 2012.
n Our estimates currently factors in 3% volume de-growth in FY13 to 6.07m units,
implying residual run-rate of 516,500 units/residual de-growth of ~2. Our estimates
would see further downgrades as we model for sustained weakness in volumes.
n The stock trades at 17.4x FY13E EPS of INR108.0 and 15.2x FY14E EPS of INR124.1.
Maintain Buy.
Hero MotoCorp: two-wheelers
FY11 FY12 FY13
625,000

560,000

495,000

430,000

365,000

300,000
Apr Ma y Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Hero MotoCorp: Financial & Valuation Summary

Bloomberg HMCL IN Year Net Sales PAT EPS EPS P/E P/CE P/BV EV/ RoE RoCE
Equity Shares (m) 200 End (INR m) (INR m) (INR) Gr. (%) (X) (X) (X) EBITDA (%) (%)
CMP (INR) 1,850 3/11A 192,450 20,077 100.5 -10.0 - - - - 62.5 59.2
52-Wk Range (INR) 2,279/1,703 3/12A 233,681 23,781 119.1 18.4 15.8 14.2 8.8 10.1 55.4 52.4
1,6,12 Rel. Perf. (%) 2/6/24 3/13E 230,292 21,566 108.0 -9.3 17.4 15.3 7.3 10.6 41.8 45.7
M.Cap. (USD b) 7.1 3/14E 265,789 24,779 124.1 14.9 15.2 13.3 6.0 8.7 39.7 50.4

October 2012 3
 Dashboard

Data Track Bajaj Auto

Sep-12 volumes in-line, 3W surprise positively; upside risk to our estimates

Snapshot of volumes for September

Residual FY13 YTD
YoY MoM YoY Residual
Sep-12 Sep-11 Aug-12 YTDFY13 Chg (%) FY13E Monthly Monthly
(%) (%) (%) Gr. (%)
Run rate Run rate
Total volume 360,152 417,686 -13.8 344,906 4.4 2,128,179 -5.7 4,257,832 -2.1 1.8 354,942 354,697
Motorcycl es 315,314 371,208 -15.1 304,352 3.6 1,911,147 -4.0 3,795,432 -1.0 2.2 314,047 318,525
Total Two-Whee l ers
315,314 371,208 -15.1 304,352 3.6 1,911,147 -4.0 3,795,432 -1.0 2.2 314,047 318,525
Three -Whee l ers 44,838 46,478 -3.5 40,554 10.6 217,032 -18.6 462,400 -10.2 -1.3 40,895 36,172
Source : Company/MOSL
Highlights
Volume de-growth is n Bajaj Auto’s total volumes de-grew 14% YoY (+4.4% MoM) to 360,152 (v/s est of
largely owing to festive 356,500). Domestic volumes de-grew by 18% YoY (+6% MoM) to 226,930 (v/s est of
season this year being a 221,500), whereas exports declined 6% YoY (+1% MoM) to 133,222 units (v/s est
month later than it was 135,000 units).
last year n Overall motorcycle volumes de-grew 15% YoY (+4% MoM) to 315,314 (v/s est
315,000). Volume de-growth is largely owing to festive season this year being a
month later than it was last year. We estimate motorcycle volume de-growth of
1% to 3.8m units, implying residual growth of 2.2% and run-rate of 314,047 units,
implying upside risk to volumes if demand picks-up during festive season.
n Recently launched Pulsar 200 NS and Discover 125 ST continues to ramp-up well
with overall contribution of ~44,000 units (~32,000 units in Aug-12 & 20,000 in Jul-
12). Pulsar and Discover contributed to ~64% of motorcycle volumes.
n Three-wheeler sales de-grew by 3.5% YoY (+11% MoM) to 44,838 (est 41,500 units),
driven by pick-up in export volumes to Sri Lanka. We model 3W volumes de-
growth of ~10% in FY13 to 0.46m units, implying residual run-rate of 40,895 units
(de-growth of 1%).
n Our estimates could see upgrades if demand picks-up in 2Ws during festive season
and 3W volume momentum sustains. The stock trades at 18x FY13E EPS of INR99.3
and 14.3x FY14E EPS of INR124.3. Maintain Buy.

Bajaj Auto: Financial & Valuation Summary

Bl oombe rg BJAUT IN Year Net Sales PAT EPS EPS P/E P/CE P/BV EV/ RoE RoCE
Equi ty Shares (m) 289.4 End (INR m) (INR m) (INR) Gr. (%) (X) (X) (X) EBITDA (%) (%)
CMP (INR) 1,784 3/11A 163,981 26,150 90.4 43.9 - - - - 66.7 76.0
52-Wk Range (INR) 1,839/1,351 3/12A 195,290 31,069 107.4 18.8 16.6 15.9 8.5 12.1 56.7 73.0
1,6,12 Re l .Perf.(%) -4/0/15 3/13E 195,245 28,748 99.3 -7.5 18.0 17.1 7.1 12.5 43.3 60.0
M.Cap. (USD b) 9.3 3/14E 226,449 35,980 124.3 25.2 14.3 13.8 5.8 9.6 44.5 61.2

October 2012 4
 Dashboard

Two-wheeler volumes (units)

FY11 FY12 FY13

440,000

Discover and Pulsar 375,000

contribute ~64% to
two-wheeler volumes 310,000

245,000

180,000
Ap r Ma y Jun Ju l Aug Sep Oct Nov Dec Jan Feb Mar

Three-wheeler volumes (units)

FY11 FY12 FY13

52,000

45,000

Three-wheeler volumes 38,000

positively surprises
31,000

24,000
Apr Ma y Jun Jul Aug Sep Oct Nov Dec Ja n Fe b Mar

Export volumes (units)

FY11 FY12 FY13

200,000

160,000
Exports are impacted by
custom duty hike in 120,000
Sri Lanka
80,000

40,000
Ap r May Ju n Jul Aug Sep Oct No v De c Ja n Fe b Ma r
Market mix

Domestic Exports
100%

75%

50%
Market mix
remains stable 25%

0%
May-08

Nov-08

Mar-09
May-09

Nov-09

Mar-10
May-10

Nov-10

Mar-11
May-11

Nov-11

Mar-12
May-12
Jul-08
Sep-08

Jan-09

Jul-09
Sep-09

Jan-10

Jul-10
Sep-10

Jan-11

Jul-11
Sep-11

Jan-12

Jul-12
Sep-12

Source: Company/MOSL
October 2012 5
 Dashboard

Data Track Maruti Suzuki

Sep-12 above est driven by ramp-up at Manesar & new Alto

Snapshot of volumes for September

Residual FY13 YTD
YoY MoM YoY Residual
Sep-12 Sep-11 Aug-12 YTDFY13 Chg (%) FY13E Monthly Monthly
(%) (%) (%) Gr. (%)
Run rate Run rate
Total volume 93,988 85,565 9.8 54,154 73.6 526,275 -1.4 1,176,780 3.8 8.4 108,417 87,713
Domes ti c 88,801 78,816 12.7 50,129 77.1 473,221 0.0 1,054,925 4.8 9.1 96,951 78,870
A1 1,400 1,993 -29.8 1,382 1.3 8,583 -28.9
C 12,620 11,737 7.5 11,593 8.9 59,166 -24.5
A2 55,563 55,053 0.9 26,739 107.8 289,060 -10.6
A3 11,982 9,607 24.7 3,532 239.2 76,011 37.5
A4 12 14 NA 0 NA 35 NA
UV 7,224 412 NA 6,883 5.0 40,366 NA
Export 5,187 6,749 -23.1 4,025 28.9 53,054 -12.7 121,855 -4.3 3.3 11,467 8,842
Source: Compa ny/MOSL
Highlights
Ramp-up at Manesar and  Domestic volumes at 88,801 (v/s est 66,000) was driven by ramp-up at Manesar
new Alto pre-launch and new Alto pre-launch inventory filling. Ertiga continues to do well with ~6,750
inventory filling led to units. Mini segment (M800, Alto, Wagon-R, A-Star) volume momentum improved,
surprise in volumes. with 5% YoY (+77% MoM) growth in volumes, driven by pre-launch inventory filling
Mgmt expects further of new Alto. While Dzire volumes ramped-up to 11,694 units (v/s 3,085 units in
ramp-up to add 15k units/ Aug-12), Swift volumes are estimated to have ramped-up to ~11,000 units (v/s 800
month units in Aug-12). However, demand for petrol vehicles remained under pressure.
 The management has indicated that Manesar’s operations would normalize by
end-Oct and it has currently ramped-up operations to ~1,000 cars/day (v/s capacity
of 1,700 cars/day). It expects further ramp-up to add ~15,000 units/month, of which
~5,000/month would be of A-Star exports. However, considering normal operations
at SPIL (diesel engine plant), we believe MSIL would built diesel engine inventory
for usage upon normalization of operations. We estimate loss of ~36,000 units in
FY13, as believe that it can makes-up for lost volumes in 4QFY13.
 We are revising our estimates to factor in for faster than estimated ramp-up. Our
estimates now factors in for volume growth of 3.8%/15% in FY13/FY14 to 1.18m/
1.35m units, JPY/INR of 0.685/0.663 and ~10bp/10bp increase in staff cost in FY13
and FY14, resulting in -10bp/+140bp change in EBITDA margins in FY13/FY14 (excl
SPIL). As a result, our consol. EPS has seen upgrade of ~3%/1% for FY13/FY14 to
INR67.2/94.8 and cash EPS upgrade of ~2/1% to INR127/INR166.
 The stock trades at 14.4x FY14 consol EPS of INR94.8 and 8.2x FY14 Cash EPS.
Maintain Buy with price target of INR1,660 (~10x FY14 CEPS/17.5x FY14 EPS).

Maruti Suzuki: Financial & Valuation Summary

Bloomberg MSIL IN Year Total Inc. PAT Con. EPS EPS Con. P/E P/CE P/BV EV/ RoE RoCE
Equity Shares (m) 302.1 End (INR m) (INR m) (INR) Gr. (%) (x) (x) (X) EBITDA (%) (%)
CMP (INR) 1,364 3/11A 369,199 23,101 82.4 -9.2 - - - - 16.5 22.1
52-Wk Range (INR 1,498/906 3/12A 355,871 16,351 58.2 -29.4 23.5 14.2 2.6 12.7 10.8 13.2
1,6,12 Rel.Perf.(%) -2/12/4 3/13E 427,281 19,993 67.2 15.5 20.3 10.7 2.2 9.2 10.5 12.4
M.Cap. (USD b) 7.9 3/14E 500,583 28,234 94.8 41.1 14.4 8.2 1.9 6.4 13.2 15.9

October 2012 6
 Dashboard

Monthly volumes (units)

140,000
FY11 FY12 FY13

115,000

Demand for petrol car 90,000

remains weak
65,000

40,000
Apr May Jun Jul Aug Se p Oct Nov Dec Ja n Fe b Ma r

Export volumes (units)

FY11 FY12 FY13

20,000

15,000
Export de-grew
by 23% YoY 10,000

5,000

0
Apr May Jun Jul Aug Sep Oct Nov Dec Ja n Fe b Mar

Segment mix (domestic)

A1 A2 A3 + A4 MPVs + UVs
100%

75%
A2 & A3 segments
50%
dominate the
segment mix; UVs 25%
contribution rising
0%
May-08

Nov-08

Mar-09
May-09

Nov-09

Mar-10
May-10

Nov-10

Mar-11
May-11

Nov-11

Mar-12
May-12
Jul-08
Sep-08

Jan-09

Jul-09
Sep-09

Jan-10

Jul-10
Sep-10

Jan-11

Jul-11
Sep-11

Jan-12

Jul-12
Sep-12

Market mix

Domes ti c Sa l es Exports
100%

75%
Export contribution to
50%
volumes fell
to ~11% in FY12 from 25%
14.5% in FY10
0%
May-08

Nov-08

Mar-09
May-09

Nov-09

Mar-10
May-10

Nov-10

Mar-11
May-11

Nov-11

Mar-12
May-12
Jul-08
Sep-08

Jan-09

Jul-09
Sep-09

Jan-10

Jul-10
Sep-10

Jan-11

Jul-11
Sep-11

Jan-12

Jul-12
Sep-12

Source: Company/MOSL
October 2012 7
 Dashboard

Data Track Mahindra & Mahindra

Sep-12 volumes in line; growth in pick-up segment moderates, passenger
remains strong; tractor sales continues to decline
Snapshot of volumes for September
Residual FY13 YTD
YoY MoM YoY Residual
Sep-12 Sep-11 Aug-12 YTDFY13 Chg (%) FY13E Monthly Monthly
(%) (%) (%) Gr. (%)
Run rate Run rate
Total volume 68,427 68,810 -0.6 59,070 15.8 376,684 10.5 786,766 9.5 8.6 68,347 62,781
UV 39,404 34,307 14.9 37,006 6.5 221,976 26.6 461,137 20.0 14.5 39,860 36,996
LCV 990 968 2.3 724 36.7 6,123 -1.2 14,514 5.0 10.1 1,399 1,021
Veri to 1,900 1,560 21.8 2,102 -9.6 8,151 -6.4 20,069 12.5 30.5 1,986 1,359
Three-Wheel ers 6,048 7,302 -17.2 6,004 0.7 31,016 -6.4 67,440 0.0 6.2 6,071 5,169
Tra ctors 20,085 24,673 -18.6 13,234 51.8 109,418 -6.9 223,606 -5.0 -3.1 19,031 18,236
Source: Compa ny/MOSL
Highlights
Recently launched  M&M’s September-12 volumes came at 68,427 (v/s est 69,400), down 1% YoY (+16%
Quanto has garnered MoM). Sales stood marginally lower due to moderation in growth for the pick-
3200 bookings. Also, ups/LCVs. Our FY13 volume estimate of 9.5% growth implies 8.8% residual growth
XUV5OO has an order with monthly run-rate of 62,619 units.
book of 14k units with  UV volumes grew 14.9% YoY (+6.5% MoM) to 39,404 (v/s est 40,000), driven by
waiting period ranging healthy growth in passenger UVs and launch of Quanto (mini SUV based on Xylo
from 6-15 weeks across platform). However, growth in pick-up segment moderated to 7% YoY to 14,417
markets. units (v/s FY12 growth of ~45%). Our FY13 estimates factor in 20% YoY growth in
UVs to 461,137, implying residual run-rate of 39,860 (14.5% residual growth).
 3-wheeler volumes de-grew 17.2% YoY (+0.7% MoM) to 6,048 (v/s est 6,300). Our
FY13 estimates factors in flat volumes, implying residual run rate of 6,071 (6.2%
residual growth).
 Speaking on the performance for the month of Sep-12 , Mr Pravin Shah, Chief
Executive, Automotive Division said, “We are happy with the performance and
growth that we have achieved during September 2012 over the festive season
month of September 2011. Post reduction in CRR, banks have started cutting
lending rates and are also looking at reducing vehicle loan rates. We are hopeful
of a good performance in the upcoming festive season”.
 Over 3200 bookings of the recently launched Quanto (mini SUV) have been
received. M&M also stated that XUV5OO has an order book of 14k.
 Tractor sales declined by 18.6% YoY (+51.8% MoM) to 20,085 units (v/s est ~20,000
units), as festive dispatches to dealers this year would be reflected in Oct/Nov.
We expect FY13 volumes to drop by 5% for M&M (industry growth at 0-2%) to
223,606, implying a residual run-rate of 19,031 units.
 The stock trades at 13.6x FY13E consolidated EPS of INR63.7 and 11.1x FY14E
consolidated EPS of INR78.4. Maintain Buy.

Mahindra and Mahindra: Financial & Valuation Summary
Bl oomberg MM IN Year Net Sales S/A PAT * S/A EPS * Cons. Con. EPS P/E Cons. RoE RoCE EV/ EV/
Equi ty Sha res (m) 587.2 End (INR m) (INR m) (INR) EPS (INR) Gr (%) (x) P/E (x) (%) (%) Sales (x) EBITDA
CMP (INR) 870 3/11A 234,603 25,732 43.0 48.0 18.1 ‐ ‐ 25.0 26.8 ‐ ‐
52-Wk Ra nge (INR) 875/622 3/12A 318,535 28,888 48.3 51.2 6.6 18.0 17.0 23.0 23.1 1.6 13.6
1,6,12 Rel.Perf.(%) -2/6/5 3/13E 393,584 33,149 55.4 63.7 24.4 15.7 13.6 21.7 24.3 1.3 11.1
M.Ca p. (USD b) 10.0 3/14E 443,341 36,511 61.0 78.4 22.9 14.3 11.1 19.3 22.7 1.2 10.4
* S/A i ncl udi ng MVML

October 2012 8
 Dashboard

Utility vehicle volumes (units)

FY11 FY12 FY13

48,000

39,000
UV volumes continue
to remain strong
30,000

21,000

12,000
Apr Ma y Jun Jul Aug Sep Oct Nov Dec Jan Feb Ma r

Tractor volume (units)

FY11 FY12 FY13

36,000

28,000
Tractor volumes
de-grew 19% YoY 20,000

12,000

4,000
Apr Ma y Jun Jul Aug Se p Oct Nov Dec Jan Fe b Mar

Product mix

UVs Tra ctors LCVs , 3-whe el e rs Cars

100%

Tractors and UVs 75%

dominate the segment

50%
mix, but we expect the
share of three wheelers 25%
and LCVs to increase
0%
May-08

Nov-08

Mar-09
May-09

Nov-09

Mar-10
May-10

Nov-10

Mar-11
May-11

Nov-11

Mar-12
May-12
Jul-08
Sep-08

Jan-09

Jul-09
Sep-09

Jan-10

Jul-10
Sep-10

Jan-11

Jul-11
Sep-11

Jan-12

Jul-12
Sep-12

Source: Company/MOSL

October 2012 9
 Dashboard

Data Track Tata Motors

Sep-12 in-line at 75,773 (-4% YoY, +5.5% MoM, v/s est 77,000); M&HCV volumes
remain under pressure
Snapshot of volumes for September
Residual FY13 YTD
YoY MoM YoY Residual
Sep-12 Sep-11 Aug-12 YTDFY13 Chg (%) FY13E Monthly Monthly
(%) (%) (%) Gr. (%)
Run rate Run rate
Total volume 75,773 78,783 -3.8 71,826 5.5 409,864 2.6 936,680 3.3 3.9 87,803 68,311
HCV's 16,332 19,583 -16.6 15,515 5.3 82,639 -20.2 195,380 -11.7 -4.2 18,790 13,773
LCV's 37,007 32,118 15.2 33,230 11.4 192,662 15.3 417,900 14.9 14.5 37,540 32,110
Cars 17,794 21,743 -18.2 18,374 -3.2 108,873 2.3 261,290 -1.5 -4.1 25,403 18,146
UV's 4,640 5,339 -13.1 4,707 -1.4 25,690 13.5 62,110 10.0 7.6 6,070 4,282
of whi ch e xports 5,441 6,217 -12.5 4,373 24.4 27,749 -10.7
Tot al volumes es timated by assuming export volumes Source : Company/MOSL

M&HCV volume
continues to be under
pressure, with no major
seasonal improvement
MoM.
Highlights
n Total September-12 volumes de-grew 4% YoY (+5.5% MoM) to 75,773 units (v/s est
77,000). While domestic CVs grew by 5.3% YoY (+7.8% MoM) led by continued
strong momentum in LCV sales, the domestic PVs declined by 17.7% YoY (-3%
MoM). Based on our volume growth estimate of 3.3% for FY13, implied residual
run-rate is ~87,803 units (3.9% residual growth).
n Domestic CV volumes grew 5.3% YoY (7.8% MoM) to 48,680 (v/s est 48,350) led by
strong LCV growth of 18.9% YoY (+9.6% MoM) to 33,393 (v/s est 31,750). However,
M&HCV volume continues to be under pressure, with de-growth of 15.8% YoY
(+4.1% MoM) to 15,287 (v/s est 16,600), with no major seasonal improvement
MoM. Our FY13 estimates factor in volume growth of 4.8% for CVs (incl exports)
with M&HCV volume decline of 11.7% and ~14.9% growth in LCVs.
n Domestic passenger cars de-grew by 18.5% YoY (-3.4% MoM) to 17,133 (v/s est
17,833), driven by 87% YoY (-15.6% MoM) growth in Nano volumes. Nano volumes
came at 5,491 (v/s 6,507 in Jul-12). Ex Nano, domestic car volumes de-grew 35.6%
YoY (+3.8% MoM) impacted by 23%/52% YoY decline in Indica/Indigo volumes
respectively. We factor in a drop of 1.5% in passenger cars volumes in FY13.
n Domestic UV volumes de-grew 14.9% YoY (-1.4% MoM) at 4,519 (v/s est 4,610). Our
FY13 estimate assumes volume growth of 10%.
n We factor in overall volume growth of 3.3% in FY13. FY13 JLR volumes are estimated
at ~362,500 (+15%).
n The ordinary/DVR stock is currently trading at 8.3x/5x FY13E and 6.6x/4x FY14E
consolidated EPS. Maintain Buy with target price of INR370/INR223 for ordinary/
DVR shares.

Tata Motors: Financial & Valuation Summary

Blo ombe rg TTMT IN Year Sales Adj. PAT Adj. EPS Norm. P/E Norm. RoE RoCE EV/ EV/
Actual Eq. Sh (m) 3,173.8 End * (INR m) (INR m) (INR) EPS (INR) ^ Ratio P/E (x) (%) (%) Sales (x) EBITDA (x)
CMP (INR) 273 3/11A 1,221,279 90,695 27.3 15.4 10.1 17.8 47.3 26.5 0.0 0.0
52-Wk Range (INR) 321/138 3/12A 1,656,545 125,568 37.8 22.2 7.3 12.4 38.4 24.1 0.6 4.5
1,6,12 Rel. Perf. (%) 7/-11/57 3/13E 1,971,042 110,482 33.2 14.0 8.3 19.6 25.2 23.9 0.5 3.8
M.Cap. (USD b) 17.3 3/14E 2,185,850 137,408 41.3 19.5 6.6 14.0 24.7 24.2 0.4 3.2
* Cons ol i date d; ^ Norma l i ze d for capi tal i zed e xpens es

October 2012 10
 Dashboard

M&HCV volumes (units)

FY11 FY12 FY13

28,000

M&HCV volumes 22,000

continue to disappoint
16,000

10,000

4,000
Apr May Jun Jul Aug Sep Oct Nov Dec Ja n Fe b Mar

LCV volumes (units)

FY11 FY12 FY13

48,000

40,000
LCV volumes 32,000
remains robust
24,000

16,000

8,000
Apr May Jun Jul Aug Se p Oct Nov De c Ja n Fe b Mar

Car volumes (units)

FY11 FY12 FY13

38,000

32,000
Domestic car volumes
grew 18% YoY 26,000

20,000

14,000

8,000
Apr Ma y Jun Jul Aug Sep Oct Nov De c Ja n Feb Ma r
Product mix in the CV segment

M&HCVs LCVs
100%

75%
LCVs account for ~70% of
50%
the CV product portfolio
25%

0%
May-08

Nov-08

Mar-09
May-09

Nov-09

Mar-10
May-10

Nov-10

Mar-11
May-11

Nov-11

Mar-12
May-12
Jul-08
Sep-08

Jan-09

Jul-09
Sep-09

Jan-10

Jul-10
Sep-10

Jan-11

Jul-11
Sep-11

Jan-12

Jul-12
Sep-12

Source: Company/MOSL

October 2012 11
 Dashboard

Data Track TVS Motor

Volumes de-grew 20.7% YoY; while motorcycles de-grew 30.9% YoY

Snapshot of volumes for June

Aug-12 Aug-11 YoY (%) Jul-12 MoM (%) YTDFY13 Chg (%)
Total volume 154,647 194,898 -20.7 161,255 -4.1 835,062 -9.3
Motorcycles 53,673 77,726 -30.9 53,355 0.6 300,402 -17.0
Scooters 38,193 52,253 -26.9 40,895 -6.6 191,920 -12.4
Mopeds 58,874 60,205 -2.2 63,704 -7.6 326,453 1.9
Source: Company/MOSL

Motorcyle volumes (units)

FY11 FY12 FY13

98,000

86,000
Motorcycle volumes
decline 74,000

62,000

50,000
Apr Ma y Jun Jul Aug Se p Oct Nov De c Ja n Fe b Mar

Scooters and mopeds (units)

FY11 FY12 FY13
132,000

114,000

Scooter volumes also 96,000

under pressure
78,000

60,000
Apr Ma y Jun Jul Aug Sep Oct Nov Dec Jan Fe b Mar

Sales mix

Motorcycl e s Scooters & Mope ds

100%

75%
Scooters and
mopeds have been the 50%
key volume driver
25%

0%
May-08

Nov-08

Mar-09
May-09

Nov-09

Mar-10
May-10

Nov-10

Mar-11
May-11

Nov-11

Mar-12
May-12
Jul-08

Jan-09

Jan-11

Jan-12
Sep-08

Jul-09

Jan-10
Sep-09

Jul-10
Sep-10

Jul-11
Sep-11

Jul-12
Sep-12

Source: Company/MOSL
October 2012 12
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Special Report INDIA AUTO: Channel checks

2-W channel checks suggest weak demand, inventory pile-up; Early signs of
dealers offering discounts

We interacted with a cross-section of 2-wheeler dealers across India. Key takeaways:

n Demand continues to remain weak, despite the start of festive season
n Dealer inventory remains high at over 30 days across players (including HMSI),
leaving limited room for festive build-up
n Retail sales under pressure for HMSI as well, despite reporting strong wholesale
volume growth
n Discounts/incentives stable but players pushing sales through finance schemes;
West worst hit
n Japanese players enjoy higher market share in the Southern market
n VALUATION & VIEW: Bajaj Auto better placed than Hero MotoCorp.

Demand continues to remain weak, despite the start of festive season

Our channel interactions indicate continued weakness in demand in the two-wheeler
industry.
n While demand in the Kerala market increased marginally YoY during the festive
season (Onam in August), it stood below the expectation of dealers/OEMs. Kerala
being a relatively high-end/premium segment market, Bajaj benefited with the
help of its new launches leading to double digit growth in sales. However, in
other markets, Bajaj’s new launches, though received positive response, is
cannibalizing sales of its existing product range.
n Festive demand during Ganesh Chaturthi festival in Maharashtra has been weak
as customers delay purchases in view of weak income growth and inflationary
trend in the economy.

Dealer inventory remains high at over 30 days across players (including

HMSI), leaving limited room for festive build-up
n Our channel interaction indicated inventory levels of over 30 days across players
– Hero (45-50 days), Bajaj (35-40 days), HMSI (30 days), and Yamaha (45 days).
n With weak festive demand and already high inventory, we expect wholesale
dispatches during festive season to be lower YoY, particularly for Hero MotoCorp
as it corrects high channel inventory.

Channel inventory remains high across players (est days)

Source: Company, MOSL

October 2012 13
 Dashboard

Retail sales under pressure for HMSI as well, despite reporting strong
wholesale volume growth
n While HMSI continues to report healthy volume growth, our channel check suggests
weak demand and inventory pile-up with dealers.
n The strong growth in wholesale volumes is largely a reflection of network
expansion (currently ~600 dealers v/s ~450 last year) and inventory pile-up with
dealers (around 30 days).
n HMSI’s volume growth is expected to moderate on the back of weak demand,
high channel inventory and capacity expansion (2nd plant) is in the base.

Growth rate to moderate with weak retail demand, high channel inventory & as capacity expansion is in the base

Source: Company, MOSL

Discounts/incentives stable but players pushing sales through finance

schemes; West worst hit
n Past experience suggest minimal positive impact of discounts on demand. This,
together with high base and negative impact on brand, is keeping companies
away from offering discounts/freebies. However, selectively dealers have started
offerings discounts/freebies given high inventory.
n Regionally, East and South remains relatively healthy, followed by North. Western
market is the worst hit.

West is the largest 2W market followed by South and North

Note: Based on FY12 sales Source: Company, MOSL

October 2012 14
 Dashboard

Japanese players enjoy higher market share in the Southern market

n All the three Japanese players viz HMSI, Yamaha and Suzuki have relatively higher
market share in the southern market.
n Our channel interaction indicated that with higher education levels and higher
exposure to brands/technology, customers perceive Japanese brands to be
superior to Indian brands.
n Thus, it would be imperative over the long term for Indian brands to consistently
bring in superior products to sustain and grow their market position.

Share of sales from the Southern market is higher than Industry average for Japanese players

Note: Based on FY12 sales Source: Company, MOSL

Valuation & view: Bajaj Auto better placed than Hero MotoCorp
n After 3 years of strong volume growth, domestic two-wheeler volumes are
witnessing some pressure over last 6 months. This coupled with increased
competitive intensity could put pressure on market share and profitability for
incumbents.
n We believe recovery in demand in upcoming festive season would be very critical
to maintain profitability.
n We believe Bajaj Auto is better placed vis-à-vis Hero MotoCorp due to its
diversified product/market mix and would be less impacted to any increase in
competitive intensity.

Financials and Valuations

Volume gr. (%) EPS (INR) EPS Gr. (%) P/E (x) P/CEPS (x) EV/EBITDA(x) P/B(x) RoE (%)
FY12 FY13E FY12 FY13E FY12 FY13E FY12 FY13E FY12 FY13E FY12 FY13E FY12 FY13E FY12 FY13E
Bajaj Auto 13.7 -2.1 107.4 99.3 18.8 -7.5 16.6 18.0 15.9 17.1 12.1 12.5 10.5 8.5 56.7 43.3
Hero Honda 15.4 -2.6 119.1 108.0 18.4 -9.3 15.5 17.1 14.0 15.0 10.0 10.4 12.5 8.6 55.4 41.8
Source: Company, MOSL

October 2012 15
 Dashboard

Special Report Tata Motors: JLR momentum to sustain; 13.4% volume

CAGR over FY12-15
Strong FCF to drive de-leveraging despite significant investment program

JLR product action, market expansion to drive 13.4% CAGR (FY12-15)

Luxury vehicle market volume momentum remains intact. Top 4 players grew ~9.3%
in FY13YTD (Apr-Aug) led by 21% growth in China. Luxury SUV (JLR's strength) growth
remains robust across markets; FY13YTD, SUV volume growth is 40% for JLR and 18%
for Mercedes Benz. Expect JLR's volumes to grow ~15% in FY13 leading the 13.4%
CAGR over FY12-15E on the back of product expansion (40 product actions over 5
years) and further market penetration. JLR's China volumes should benefit from
expected ~18% CAGR in the market over CY11-15, JLR's own dealer expansion and
Chery JV enabling JLR to compete better with a production base in China.

M&HCV segment could witness strong revival in FY14

Likely bottoming out of IIP growth (1.4% in FY13, lowest since FY92), expected interest
rate downcycle, and favorable macro impetus (e.g. FDI in retail) should augur well for
M&HCV business. We expect Tata Motors' (TTMT) M&HCV volume to grow 10% in
FY14, recovering from likely 12% de-growth in FY13. LCV volume momentum remains
strong with ~20% growth in FY13YTD. Expect 15% CAGR in LCV volumes over 2 years,
driven by SCVs.

Consolidated EBITDA margin to improve in FY14, strong FCF despite

Also refer our Report dated
1 October 2012
aggressive capex
We expect Consolidated EBITDA margin to recover 50bp in FY14 to 14.2%. JLR's EBITDA
margin should improve 60bp to 15% in FY14 on the back of better mix and operating
leverage. We believe TTMT has multiple levers to support/improve margins over
next 3-4 years. Our estimates for FY15 are yet to factor in any benefits from the Chery
JV and own engine plant in UK & India. Our estimates suggest consolidated FCF
generation of INR274b over FY13-15, despite investing ~INR600b, transforming it into
a net cash company by FY15.

8% upgrade in FY14 EPS; Buy with TP of INR370/223 (ordinary/DVR)

We believe JLR is on the right strategic path and is investing in the right areas, resulting
in its evolution to a much stronger and balanced player in the luxury vehicle market.
The CV business, which contributes ~35% to fair value, is expected to witness recovery
in FY14, resulting in significant improvement in standalone operations. We are
upgrading our FY14 consolidated EPS by 8.1% to INR41.1 to factor in for improvement
in JLR's product mix. The ordinary/DVR stock is currently trading at 8x/4.8x FY13E and
6.5x/3.9x FY14E consolidated EPS. Maintain Buy with revised target price of INR370
(FY14 SOTP based) for ordinary share and INR223 for DVR (40% discount to ordinary).

October 2012 16
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Domestic model-wise volumes for September 2012*

October 2012 17
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Domestic model-wise volumes for September 2012* (Contd...)

October 2012 18
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Sector Gauge Two-wheelers

Domestic volumes moderate

Two-wheelers: Volume snapshot Mar-12

Aug-12 Aug-11 YoY (%) Jul-12 MoM (%) YTD FY13 Chg (%) FY12 Chg (%)
Total Domestic 2W 1,057,857 1,107,782 -4.5 1,132,696 -6.6 5,710,082 6.8 13,424,594 14.3
% of Tota l 2W 87 87 88 87 87
Total Motorcycle 766,059 836,887 -8.5 821,821 -6.8 4,216,829 3.3 10,086,547 11.9
% of Domes ti c 2W 72 76 73 74 75
Scooters & Mopeds 291,798 270,895 7.7 310,875 -6.1 1,493,253 18.0 3,338,047 22.5
% of Domes ti c 2W 28 24 27 26 25
Exports 161,061 172,261 -6.5 158,429 1.7 842,606 -2.1 1,957,613 27.8
% of Tota l 2W 13 13 12 13 13
Total 2W 1,218,918 1,280,043 -4.8 1,291,125 -5.6 6,552,688 5.6 15,382,207 15.9
Source: SIAM/MOSL

Two-wheelers: Domestic volume trend (units)

FY11 FY12 FY13

1,400,000

Domestic two-wheeler 1,200,000

volumes show signs 1,000,000
of slowdown
800,000

600,000

400,000
Oct
May

Nov
Apr

Mar
Aug
Jun

Sep

Jan

Feb
Dec
Jul

Domestic market share in 2-wheelers

Increasing competition in
2-wheeler segment,
with HMSI consistently
gaining market share

October 2012 19
 Dashboard

Motorcycles: domestic volume trend

FY11 FY12 FY13

1,000,000

Slowdown in domestic 800,000

motorcycle volumes
600,000

400,000

Oct
May

Nov
Apr

Mar
Aug
Jun

Sep

Jan

Feb
Dec
Jul
Motorcycles: domestic market share

He ro Moto Corp Ba ja j Au to HMSI Yama ha TVS Mo tor

100%
Hero MotoCrop
continues to dominate 75%
motorcycle segment, 50%
although HMSI's
25%
increasing its
market share 0%
Oct-08

Oct-09

Oct-10

Oct-11
Aug-08

Aug-09

Aug-10

Aug-11

Aug-12
Apr-08

Apr-09

Apr-10

Apr-11

Apr-12
Jun-08

Dec-08
Feb-09

Jun-09

Dec-09
Feb-10

Jun-10

Dec-10
Feb-11

Jun-11

Dec-11
Feb-12

Jun-12
Two-wheelers: Product mix

Mo torcycl e Scoo ters & Mo pe d s

100%

75%

Motorcycles dominate 50%

2W segment
25%

0%
Oct-08

Oct-09

Oct-10

Oct-11
Apr-08

Aug-08

Apr-09

Aug-09

Apr-10

Aug-10

Apr-11

Aug-11

Apr-12

Aug-12
Jun-08

Dec-08
Feb-09

Jun-09

Dec-09
Feb-10

Jun-10

Dec-10
Feb-11

Jun-11

Dec-11
Feb-12

Jun-12

Two-wheelers: export volumes (units)

FY11 FY12 FY13

200,000

175,000
Export volumes
also remain under 150,000
pressure
125,000

100,000
Oct
May

Nov
Apr

Mar
Aug
Jun

Sep

Jan

Feb
Dec
Jul

October 2012 20
 Dashboard

Sector Gauge Three-wheelers

Demand remains weak
Three-wheelers: Volume snapshot Mar-12
Aug-12 Aug-11 YoY (%) Jul-12 MoM (%) YTD FY13 Chg (%) FY12 Chg (%)
Total Domestic 3W 45,386 45,468 -0.2 44,286 2.5 200,921 0.6 513,276 -2.4
% of Total 3W 63 58 68 65 59
Passenger 37,553 36,509 2.9 36,470 3.0 163,490 4.5 406,259 -4.5
% of Domes ti c e W 83 80 82 81 79
Total Goods 7,833 8,959 -12.6 7,816 0.2 37,431 -13.4 107,017 6.3
% of Domes ti c 3W 17 20 18 19 21
<1T 7,582 7,007 8.2 7,486 1.3 36,336 -7.2 89,313 12.8
% of Goods Vehi cl e 97 78 96 97 83
>1T 251 1,952 -87.1 330 -23.9 1,095 -73.0 17,704 -17.6
% of Goods Vehi cl e 3 22 4 3 17
Exports 26,710 32,329 -17.4 21,063 26.8 107,752 -35.0 361,753 34.0
% of Total 3W 37 42 32 35 41
Total 3W 72,096 77,797 -7.3 65,349 10.3 308,673 -15.5 875,029 9.9
Source : SIAM/MOSL

Three-wheelers: volume trend (including exports)

FY11 FY12 FY13

92,000

80,000
3W volumes impacted
68,000
due to lower exports
56,000

44,000

32,000
Apr Ma y Jun Jul Aug Se p Oct Nov De c Jan Feb Ma r

Three-wheelers: domestic segment mix

Pas s e nge r Go od s
100%

75%

Passenger segment
50%
dominates three-
wheelers with over 80%
25%
contribution

0%
Oct-08

Oct-09

Oct-10

Oct-11
Apr-08

Aug-08

Apr-09

Aug-09

Apr-10

Aug-10

Apr-11

Aug-11

Apr-12

Aug-12
Jun-08

Dec-08
Feb-09

Jun-09

Dec-09
Feb-10

Jun-10

Dec-10
Feb-11

Jun-11

Dec-11
Feb-12

Jun-12

October 2012 21
 Dashboard

Three wheelers: passenger segment market share

Ba ja j Auto Pi a ggi o M&M TVS Others

100%

75%
Bajaj Auto continues to
dominate passenger
50%
segment…
25%

0%

Oct‐10

Oct‐11
Oct‐08

Oct‐09

Apr‐12

Aug‐12
Apr‐10

Apr‐11
Aug‐10

Aug‐11
Apr‐08

Apr‐09
Aug‐08

Aug‐09

Dec‐11
Feb‐12

Jun‐12
Dec‐09
Feb‐10

Jun‐10

Dec‐10
Feb‐11

Jun‐11
Jun‐08

Dec‐08
Feb‐09

Jun‐09
Three wheelers: goods segment market share

... Piaggio continues to

lead in the goods
segment

October 2012 22
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Sector Gauge Cars and UVs

Passenger cars remain sluggish, while UVs continue to grow

Passenger vehicles: Volume snapshot Mar-12

Aug-12 Aug-11 YoY (%) Jul-12 MoM (%) YTD FY13 Chg (%) FY12 Chg (%)
Total Domestic PVs 184,238 191,914 -4.0 204,969 -10.1 1,046,382 7.1 2,617,373 4.6
% of Total PVs 83 79 81 82 84
Total Cars 118,022 145,066 -18.6 143,496 -17.8 748,861 0.5 2,017,194 2.3
% of Domes ti c PVs 64 76 70 72 77
A1 & A2 84,939 104,142 -18.4 100,643 -15.6 537,305 -3.6 1,511,941 -1.7
% of Ca rs 72 72 70 72 75
A3 26,547 35,390 -25.0 36,929 -28.1 180,517 12.7 451,949 21.4
% of Ca rs 22 24 26 24 22
A4 & above 6,536 5,534 18.1 5,924 10.3 31,039 14.2 53,304 -12.6
% of Ca rs 6 4 4 4 3
UVs 45,062 26,425 70.5 44,878 0.4 207,651 55.9 365,418 15.6
% of Domes ti c PVs 24 14 22 20 14
MPVs 21,154 20,423 3.6 16,595 27.5 89,870 -9.4 234,761 9.9
% of Domes ti c PVs 11 11 8 9 9
Exports 36,848 49,646 -25.8 47,882 -23.0 223,534 1.3 507,743 14.3
% of Total PVs 17 21 19 18 16
Total PVs 221,086 241,560 -8.5 252,851 -12.6 1,269,916 6.0 3,125,116 6.1
Source : SIAM/MOSL

Cars: domestic volume (units)

FY11 FY12 FY13

240,000

200,000

Volumes remain
160,000
sluggish
120,000

80,000
Apr May Ju n Ju l Aug Sep Oct Nov Dec Ja n Feb Mar

UVs & MPVs: domestic volume (units)

FY11 FY12 FY13
76,000

64,000
Volumes improve
led by Ertiga, Duster and 52,000
Quanto
40,000

28,000

16,000
Apr May Jun Jul Au g Se p Oct No v Dec Jan Feb Ma r

October 2012 23
 Dashboard

Passenger vehicles: export volume (units)

FY11 FY12 FY13

65,000

56,000

47,000
Export volumes
pick-up 38,000

29,000

20,000
Apr Ma y Jun Jul Aug Se p Oct Nov De c Ja n Feb Ma r

Cars: domestic market share

Ma ruti Ta ta Motor Hyunda i GM Honda

100%

75%
Maruti's market share
impacted by Manesar 50%
lock-out
25%

0%
Oct‐10

Oct‐11
Oct‐08

Oct‐09

Apr‐11

Aug‐11

Apr‐12

Aug‐12
Apr‐08

Aug‐08

Apr‐09

Aug‐09

Apr‐10

Aug‐10

Feb‐11

Dec‐11
Feb‐12

Jun‐12
Jun‐08

Dec‐08
Feb‐09

Jun‐09

Dec‐09
Feb‐10

Jun‐10

Dec‐10

Jun‐11
UVs: domestic market share

Maruti's market share

improves, driven
by Ertiga

Passenger vehicles: segment mix

A2 dominates the
passenger vehicles
segment

October 2012 24
 Dashboard

Sector Gauge Commercial vehicles

LCVs remains strong, while M&HCV declines

Commercial vehicles: Volume snapshot Mar-12

Aug-12 Aug-11 YoY (%) Jul-12 MoM (%) YTD FY13 Chg (%) FY12 Chg (%)
Total Domestic CVs 66,766 64,242 3.9 65,008 2.7 314,982 4.6 809,278 18.4
% of Total CVs 91 91 88 90 90
Total M&HCV 25,003 27,442 -8.9 23,171 7.9 114,222 -11.9 348,869 8.0
% of Domestic CVs 37 43 36 36 43
Goods 21,103 23,440 -10.0 18,833 12.1 92,552 -16.2 299,287 8.8
% of M&HCVs 84 85 81 81 86
Pa s s enger 3,900 4,002 -2.5 4,338 -10.1 21,670 12.7 49,582 3.3
% of M&HCVs 16 15 19 19 14
Total LCVs 41,763 36,800 13.5 41,837 -0.2 200,760 17.0 460,409 27.7
% of Domestic CVs 63 57 64 64 57
Goods 37,970 32,801 15.8 36,778 3.2 177,405 18.0 411,229 30.2
% of LCVs 57 51 57 56 51
Pa s s enger 3,793 3,999 -5.2 5,059 -25.0 23,355 10.3 49,180 9.8
% of LCVs 6 6 8 7 6
Exports 6,759 6,703 0.8 8,491 -20.4 36,292 7.8 92,327 24.8
% of Total CVs 9 9 12 10 10
Total CVs 73,525 70,945 3.6 73,499 0.0 351,274 4.9 901,605 19.0
Source : SIAM/MOSL

M&HCVs: Domestic volume - goods (units)

FY11 FY12 FY13

40,000

32,000
M&HCV volumes
remains muted 24,000

16,000

8,000

0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Fe b Ma r

M&HCVs: domestic volume - buses (units)

FY11 FY12 FY13

7,500

6,000

4,500

3,000

1,500

0
Apr Ma y Jun Jul Aug Se p Oct Nov Dec Jan Fe b Mar

October 2012 25
 Dashboard

M&HCVs: domestic market share, goods (%)

Ta ta M oto r As ho k Le yl a n d Ei ch e r
100%

75%

Tata Motors continue 50%

to dominate M&HCV
goods segment 25%

0%

Oct-08

Oct-09

Oct-10

Oct-11
Apr-08

Aug-08

Apr-09

Aug-09

Apr-10

Aug-10

Apr-11

Aug-11

Apr-12

Aug-12
Jun-08

Dec-08
Feb-09

Jun-09

Dec-09
Feb-10

Jun-10

Dec-10
Feb-11

Jun-11

Dec-11
Feb-12

Jun-12
M&HCVs: domestic market share, buses (%)

Ta taMotor As hokLeyl and Ei che r Swara j

100%

75%

50%

25%

0%
Oct-08

Oct-09

Oct-10

Oct-11
Apr-08

Aug-08

Apr-09

Aug-09

Apr-10

Aug-10

Apr-11

Aug-11

Apr-12

Aug-12
Jun-08

Dec-08
Feb-09

Jun-09

Dec-09
Feb-10

Jun-10

Dec-10
Feb-11

Jun-11

Dec-11
Feb-12

Jun-12
LCVs: domestic volumes (units)

FY13 FY11 FY12

60,000

50,000

40,000
LCVs continue
robust growth 30,000

20,000

10,000

0
Apr May Jun Jul Aug Sep Oct Nov De c Ja n Fe b Mar

October 2012 26
October 2012
to CVs increased
Tata Motors dominates

LCVs contribution
the domestic LCV
segment

0%
25%
50%
75%
100%
0%
25%
50%
75%
100%

Apr-08
Jun-08 Apr-08
Aug-08 Jun-08
Oct-08 Aug-08
Dec-08 Oct-08
Feb-09 Dec-08
Feb-09
Apr-09
Apr-09
Jun-09
LCVs: domestic market share (%)

Jun-09
Goods: segment-wise break-up (%)

Aug-09
LCVs

Aug-09
TataMotor

Oct-09
Oct-09
Dec-09 Dec-09
Feb-10 Feb-10
<12T

Apr-10 Apr-10
Pi aggi o

Jun-10 Jun-10
Aug-10 Aug-10
<16T

Oct-10 Oct-10
Dec-10
M&M

Dec-10
Feb-11 Feb-11
<35T

Apr-11 Apr-11
Jun-11 Jun-11
Others

Aug-11 Aug-11
Oct-11
Oct-11
Dec-11
Dec-11
Feb-12
Feb-12
Apr-12
Apr-12
Jun-12
Jun-12
Aug-12

27
Aug-12
Dashboard

News and Events
M&M launches Quanto
BharatBenz HCV truck
Range Rover (4th generation)
October 2012
Dashboard
Major developments in the auto sector
September 2012
M&M launches Quanto (mini-SUV) at INR582k; receives 3,200 bookings
since launch
M&M launched its mini SUV Quanto with starting price of INR582k (ex-showroom
Thane). It is the smallest UV in Mahindra’s stable with sub-4 mtr in length and powered
by 1.4-litre diesel engine (3 cylinders) and thus qualifies for lower excise duty of 12%
(v/s 24%/27% for above 4mtr vehicle/ & >1.5ltr engine). It has a seating capacity of 7
people, including 2 in the last row. Quanto is based on Ingenio platform, on which
Xylo is made. Between Xylo and Quanto, M&M currently has capacity of ~7,000 units/
mth at its Chakan plant. On the occasion of the launch, Dr Pawan Goenka, President,
Automotive & Farm Equipment sectors, Mahindra & Mahindra: “With the Quanto,
Mahindra is aiming to fill a need gap in the Indian automotive market for a versatile
and compact SUV. We expect the Quanto to offer an exciting upgrade at a premium to
customers who are otherwise looking for premium diesel hatchbacks or entry level
diesel sedans”.
BharatBenz starts commercial sales of its heavy duty trucks in India
Daimler India Commercial Vehicles (DICV), the 100% Indian subsidiary of Daimler AG,
launched three heavy duty trucks under the BharatBenz brand. The three trucks
launched, are the first in a range of 17 models that Bharat Benz plans to launch over
the next 17 month. Speaking on the occasion, Marc Llistosella, Managing Director and
CEO, DICV said: “Today is an important milestone for all of us at Daimler and Indian
trucking. From today, Indian truck buyers will have a new choice. A choice, for trucks
that are more fuel efficient, more reliable and in the end makes them more successful.
BharatBenz is here, and we are proud to have delivered on the promise we made
since 2010 - to launch our trucks in September 2012. We will drive the change in the
Indian market with a whole new product, sales and service experience for our
customers.”
All new Range Rover revealed at Paris Motor Show
Land Rover has revealed the all-new Range Rover (4 th generation) at the Paris
International Motor Show. Designed and engineered at Land Rover’s development
centres in the UK, the world’s first SUV with a lightweight all-aluminium body, the
new Range Rover will be produced in a state-of-the-art new low-energy
manufacturing facility at Solihull, UK. Over £370 million has been invested in the
Solihull plant to create the world’s largest aluminium body shop. Presenting the new
Range Rover, John Edwards, Land Rover Global Brand Director said “This is a vehicle
that will take us to the next level of success. Range Rover is our flagship and a true
British success story, designed, engineered and built in Britain. Its distinctive design,
breadth of capability and class-leading refinement and comfort has always made it
unique. When we asked our customers what they wanted us to change, they told us
‘don’t change it, just make it better’. We set out to create not just the world’s finest
luxury SUV, but the world’s finest luxury vehicle.”
28

Yamaha launches Ray scooter
TVS launches 125cc Phoenix
Ssangyong Motors (Rexton)
Nissan launches Evalia
October 2012
Dashboard
Yamaha launches Ray scooter, eyes 1m and 2.8m units in India by 2014 &
2018 respectively
Yamaha entered the Indian scooter market with the launch of its new scooter Ray
priced at INR46,000 (ex-showroom Delhi). It is an automatic scooter powered by a
new 113cc engine that makes 7.1PS at 7500rpm and 8.1Nm of torque. The company
claims a 0-60kmph time of 12s and a fuel efficiency of 62.1kmpl. It was also reported
that Hiroyuki Suzuki, Chief Executive & MD at India Yamaha Motors said the company
plans to sell 0.65m units by next year from current 0.4m units. Yamaha is targeting 20%
share in the scooter segment by 2016, he added. It was also mentioned that Yamaha
has started exporting bikes to few Latin American countries and may increase export
volumes in coming years. By 2014, Yamaha aims to sell 1m units and subsequently
touch 2.8m by 2018. The company’s proposed Chennai manufacturing plant will be
operational by 2014 and total production capacity will touch 2.8m by 2018, according
to the reports.
TVS launches 125cc Phoenix motorcycle, plans to increase market share to 17%
To strengthen its position in the executive motorcycle segment, TVS Motor has
launched Phoenix 125cc motorcycle. The company claims that the motorcycle has got
a host of new features with a powerful engine which under standard test conditions
returns a mileage of 67 kmpl. It would compete with Hero MotoCorp’s Super
Splendour, Glamour125cc, Bajaj Auto’s Discover 125cc and Honda’s CB Shine 125cc.
M&M planning to invest INR15b on a new platform in collaboration with
Ssangyong Motors
Mahindra & Mahindra will reportedly invest INR15b on a new platform to be developed
in collaboration with its Korean subsidiary Ssangyong Motors. According to a media
report, Pawan Goenka, President, Automotive & Farm Equipment Sectors, Mahindra
& Mahindra said “This joint development will be taken up over the next three years.
While this investment will be on one platform, we will invest more on joint
development on other range.” The report mentioned that Goenka said, “We will launch
Rexton, a high-end SUV from the SsangYong stable by Diwali. This will be in a segment
that is higher than our successful SUV XUV 500.”
Nissan launches Evalia; plans to launch 10 new models by 2017 including
two Datsun branded vehicles
Nissan has launched its MUV Evalia priced between INR0.85m-0.99m (ex- showroom
Delhi). Mated to a 5-speed manual transmission, the front-wheel drive MPV is
powered by a 1.5-litre dCi diesel engine that produces 85PS of power and 200Nm of
torque and can accommodate 8 occupants. Nissan claims that the Evalia can hit 60km/
h in 12.7 seconds owing to its monocoque construction that gives it a lower kerb
weight compared to competing MPVs. The ARAI figure stands at 19.3kmpl which
reportedly translates to a 50% better overall efficiency compared to competition.
Nissan aims to sell about 2,000-2,500/month units of Evalia and plans to expand
production capacity either through new plants or the existing plant. The Japanese
auto maker is now firming up further expansion plans in India and announced its
intentions to launch 10 new models by March 2017, including two Datsun branded
vehicles as well.
29
 Dashboard

Volvo Eicher JV planning to invest INR10b by 2013

VE Commercial Vehicles Ltd has reportedly said it will invest INR10b by 2013 on various
activities, including expansion of engine production capacity, launch new products
and enhancing R&D. The reports quoted VEVC Managing Director Siddhartha Lal as
saying “We have set a capex of INR10b for 2012 and 2013. Our investment plans are on
track and there is no downturn effect on it.” According to the reports, the firm has a
capacity to produce 60,000 engines a year. It is setting up a new plant to roll out 100k
engines, which is based on Volvo technology, every year. The new plant will be
commissioned by the middle of next year, Lal added.

Volkswagen India planning to invest INR7b in next two years

Volkswagen Group has stated that it will invest 100 million euros (over INR7b) in India
in the next two years for upgrading products and facilities, according to the reports.
The reports quoted Volkswagen Group Chief Representative, India, John Chacko as
saying “We need investments in improving our facilities, doing minor model changes
for our exports and other areas. We are investing about 100 million euros for the
entire group in the next two years in India.” Chacko stated that “As a group we had
planned to invest INR20b that is on hold since lots of policy decisions are confusing.
We are however still putting pressure on Maharashtra government on various policy
issues.’’

Toyota Kirloskar Motor to invest INR9b on expanding production capacity

to 310k units per annum
Toyota Kirloskar Motor (TKM) will reportedly invest INR9b in India to increase the
production capacity at its Bangalore facility from current 210k to 310k units/per annum
by March next year. Toyota Kirloskar Motor Vice-Chairman Vikram Kirloskar was quoted
as saying “We will invest INR9b to expand the capacity of our Bangalore plant by
March next year. The production capacity will increase to 3.1 lakh annually from the
2.1 lakh units at present.”

Italian truck maker Iveco looking re-enter Indian truck market

It has been reported that the Italian truck maker Iveco, a part of the EUR59.6b Fiat
Group, is making a second attempt to enter the fast-growing truck market in India.
The report stated the company CEO Alfredo Altavilla said that, Iveco is scouting for a
local partner and India is on the top of its priority list. He was quoted as saying “The
only way to be successful in India is to have a strong local partner. India is one of the
important markets in the World; it is the topmost on my priority list.”
It was reported that the Iveco had a 15 percent stake in India’s second-largest truck
maker, Ashok Leyland till 2006, before it sold off its share to the promoter, Hinduja
Group, for INR6b. Iveco was instrumental in offering the technology support to Ashok
Leyland, but it has never existed as a standalone brand in India. In 2007, the company
also entered into an MoU with Tata Motors but the MoU did not fructify into a formal
agreement, according to the report.

October 2012 30

Timely analysis and insights on
all economic data releases and
developments
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This will highlight the bright
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scenario in the economy or any
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corporate CEOs. The focus here is
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visits to plant sites, construction
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implications for growth
Product Gallery
What various subject matter
experts have to say on wide-
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economy to black economy
Highlights of interactions with
politicians and bureaucrats for
insights into policy matters for
the economy and various sectors
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