H1FY18 saw continuance of bigger trends in PV segment
We analysed brand-wise data for the domestic PV industry to understand the nitty-gritties of 9.2% y-o-y growth in the domestic PV industry in H1FY18. The first half of this fiscal witnessed continuance of some bigger trends: Preference for SUVs, ~17% y-o-y growth in UVs, first-time buyers directly purchasing compact/compact sedan, reflecting y-o-y growth of 10.6% in compact and 8.8% in compact sedans, and consequently, muted growth in the mini segment, +1.6%. The compact sedan segment witnessed 8.8% y-o-y growth in YTD FY18, 39.7% y-o-y in Sep-17, led by the launch of the new Dzire. Average Dzire volumes for 2QFY18stood at 26.6k units, v/s 10k units in QvFY18, FY17 average of ~16.7k/units,and the 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 meagre 1.6% y-o-y in YTD FY18, +10.7% y-o-y in Sep-17.
There was limited GST impact on mild hybrid models like MSIL’s Ciaz, Ertiga and M&M’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 H1FY18 volumes at 14.3k units —1.5% y-o-y. The impact of the Jeep Compass is yet to be seen. Compact sedans grew 8.8% y-o-y in YTD FY18 , v/s 2.8% and -9.6% growth in FY16and FY17, respectively, primarily led by the launch of the new Dzire by MSIL. With healthy festive demand and inventory build-up, average Dzire volumes grew robustly to 26.6k units in Q2FY18 (v/s 10k units in Q1FY18). Volume for Aug-17 and Sep-17 stood at 30.9k and 34.3k, respectively (v/s average 11.2k units in Apr-July), reflecting increasing product acceptance by customers. Consequently, MSIL’s market share in the segment expanded to a three-year high of 58% in YTD FY18 (v/s 54.8% in FY17), eating into the share of close rivals Hyundai and Honda. Average waiting period for the product remains stable at 12 weeks.