Deep dive into state-wise volumes for OEMs (original equipment manufacturers) across segments.
Key conclusions of our analysis are: (i) MSIL (Maruti Suzuki India Ltds) is a clear winner with consistent market dominance across all key states, (ii) M&M (Mahindra & Mahindra) has lost significant market share in higher-income states and remains most vulnerable to shift in customer preferences towards compact SUVs and (iii) potential increase in income levels and urbanisation in states such as UP, Bihar, Rajasthan, etc. could lead to market share shifts in favour of HMSI and Royal Enfield.
PVs: Maruti is a clear winner while M&M has lost significant share in several high-income states.
Maruti is a clear winner with consistent market dominance as it has 40% plus market across all major states in India (except Andhra Pradesh). Despite intense competition and gradual shift towards premium vehicles, Maruti still has 48% market share in metros such as Delhi and ~45% share in Maharashtra. In our view, this has been possible due to the company’s ability to successfully launch new models such as Ciaz, Ertiga and introduction of automated manual technology (AMT) in entry-level models.
In the UV segment (ex-vans), M&M has lost significant market share in high-income states such as Maharashtra, Karnataka, Gujarat, Delhi and Tamil Nadu to new launches from Ford, Renault and Maruti. In fact, in Maharashtra, for 1QFY16, M&M was Number 2 player in UV segment after Maruti. However, so far the company has been largely able to maintain its dominance in states such as UP, Bihar, MP and Rajasthan. Going forward, we believe M&M remains most vulnerable to shift in customer preferences towards compact SUVs and increase in competitive intensity from MNC OEMs.
Two-wheelers: Honda leads with high scooter penetration. Scooter presence is quite high in states such as Maharashtra, Karnataka, Gujarat, Delhi and Kerala where per-capita income/literacy rate are high. HMSI is the market leader in all these states.
Royal Enfield has double-digit market share in several states; it has also garnered 6-8% market share in states such as Maharashtra, Karnataka and Tamil Nadu. However, it has only 1-2% share in several states (UP, Bihar, Rajasthan, MP, West Bengal); premiumisation in these states could present strong growth opportunity over the next 3-5 years, in our view.
In motorcycles, Bajaj Auto has lost market share across all major states due to (i) entry of Honda and (ii) significant market share gains of Royal Enfield in several states. Going forward, HMSI is also targeting to launch more models to gain market share in the premium bike segment; this does not augur well for Bajaj Auto over the medium term, we believe.
MHCVs: AL has gained share in East and West; remains market leader in South ?
Ashok Leyland (AL) has gained significant share in the eastern region as it had 19% in 1QFY16 as compared to 10-11% in FY2011. Even in the western region, AL has gained ~5% market share in the past 4-5 years. The company remains market leader in South with ~50% share.
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