MOSL: AUTOMOBILES-Dzire drives compact sedan segment in positive zone-Discounts, festive push not helping mini segment

​Automobiles: Dzire drives compact sedan segment in positive zone; Discounts, festive push not helping mini segment much

We analyzed brand-wise data for the domestic PV industry to understand the nitty-gritty of 9.2% YoY growth in the domestic PV industry in 1HFY18. The first half of this fiscal witnessed continuance of some bigger trends: (i) preference for SUVs (~17% YoY growth in UVs), (ii) first-time buyers directly purchasing compact/compact sedan (reflecting YoY growth of 10.6% in compact and 8.8% in compact sedan), and consequently, (ii) muted growth in the mini segment (+1.6%).

• Compact sedan segment witnessed 8.8% YoY growth in YTD FY18 (39.7% YoY in Sep-17), led by the launch of the new Dzire. Average Dzire volumes for 2QFY18 stood at 26.6k units (v/s 10k units in 1QFY18, FY17 average of ~16.7k/units, and previous peak of 24.5k in Oct-15).
  
• UVs continue to outpace industry growth (17% for UVs v/s 9% for the industry), driven by the UV1 segment (+24%).
  
• Despite festive push, discounts and positive rural sentiment, growth in the mini segment was a meager 1.6% YoY in YTD FY18 (+10.7% YoY in Sep-17).
  
• There was limited GST impact on mild hybrid models like MSIL’s CIAZ, Ertiga and MM’s Scorpio, as volume recovered post a blip in June-17, led by an increase in petrol variant sales.
  
• XUV5OO volumes hit an 18-month high of 3.3k units in Sep-17, with 1HFY18 volumes at 14.3k units (-1.5% YoY). Impact of Jeep Compass is yet to be seen.