Tata Motors' March Sales Growth is Disappointing

Tata Motors (TTM) vehicle sales for the month of March grew 11% YoY to 62,779 units. The growth number is disappointing compared to last few months (except October 2006 which was really bad):

• March 2007: 11%
• February 2007: 19%
• January 2007: 19%
• December 2006: 37%
• November 2006: 43.1%
• October 2006: 5.6%
• September 2006: 23.8%
• August 2006: 26.2%

Key highlights from the month of March:

• 11% YoY growth to 62,779 units
• Passenger vehicle sales of 25,760 units was highest of any month ever.
• Sales of Utility vehicles was also the highest of any month ever.
• Exports declined 33 per cent at 6,299.
• Commercial vehicle sales grew by 13% YoY.

Disclosure: I have no position in Tata Motors (TTM)

Comments

[DeepakShenoy]

There's one other reason for this: Depreciation. Indian law allows assets bought between April and September the FULL depreciation for the year (financial year April - March) and those bought from October to March only half of it. Even individuals who are professionals or file taxes for business income can claim depreciation.

March sales are always going to be lower for tata because its largest sales are commercial vehicles, and among passenger sales too, cabs are significant (they even have a special vehicle branded for taxis - called the Indicab). Depreciation effect is perhaps the worst in March and October, reflecting accordingly in Tata Motors sales. Also Ashok Leyland, another commercial auto manufacturer, has 3% lower sales (YoY)in march.

And your quote of 33% decline in exports is a misprint.
<blockquote>
Exports in the month, however, declined 33 per cent at 6,299 units as against 6,508 units in the same month of previous year, it said.
</blockquote>

That, according to my rudimentary math, is a 3.2% decline. Nothing that requires a bold font, really.

[Gaurav]

Depreciation is a phemonenon that happens every year. So why should it impact year-on-year growth rates? Have the Indian laws on depreciation changed this year because of which it is an issue this year? Thanks.