MOSL: AUTOMOBILES-Rural recovery helps Alto, Eon and Bolero-Kwid slides-Dzire drives compact sedan segment back to positive zone

​AUTOMOBILES: Rural recovery helps Alto, Eon and Bolero; Kwid slides; Dzire drives compact sedan segment back to positive zone

• We analyzed the brand-wise data for the domestic PV industry. Though the domestic PV industry grew 8.5% in FY18YTD, growth is not yet broad-based. Rural-centric models like Alto, Eon and Bolero reported positive growth following de-growth in the last 4-5 years. The compact sedan segment grew 7.7% YoY (9.6% decline in FY17) primarily led by MSIL's new Swift Dzire. The industry continues to see broad trends like SUV preference (+26% growth in compact UVs), first-time buyers directly buying compact/compact sedan (reflecting in 8.8% growth in compact and 7.7% growth in compact sedan segment), and marginal decline in the mini segment (0.4% decline).
  
• Rural recovery visible, as rural-centric models like Alto, Eon and Bolero witnessed growth after de-growing in the previous four-five years.
  
• Volumes of urban-centric models like WagonR and Kwid declined 2.7% and 20%, respectively, as customers continue to up-trade towards compact/compact SUV segment.
  
• New Dzire has driven the compact sedan segment in positive territory. The segment grew 7.7% in YTDFY18 (v/s 9.6% decline in FY17).
  
• Baleno surpassed FY17 volume of 120.8k, with YTDFY18 sales at 126.1k units.
  
• MSIL has lost market share in the mid-size segment, led by dual impact of (a) competitive pressure post launch of Hyundai's new Verna, and (b) increase in pricing of diesel hybrid post GST.
  
• UV2 segment continues to be sluggish and declined 1.2%, despite launch of Jeep Compass, given customer preference for UV1.