LTV confusion likely caused fall from September record
By Chandeepa Wettasinghe
Vehicle registrations for October increased to 55,844 from 50,489 year-on-year (YoY), but fell from a record 64,020 set in September, possibly due to the confusion over the loan-to-value (LTV) ratio set by the Central Bank to curb vehicle imports, according to a market report by JB Securities (Pvt.) Ltd.
A consistent trend of motor vehicle registrations spiking in October ahead of national budgets and their usual tax hikes was broken, while LTV ratios fell significantly across most segments.
Even though the 70 percent LTV cap was announced on September 15 to come into effect for letters of credit opened after October 18, the Central Bank later said that it will come into effect only after December 1. The Finance Minister called for the ratio to be eased up to 90 percent last month.
However, JB Securities CEO Murtaza Jafferjee speculated whether the fall was due to the LTV cap or due to an unusual delay in vehicle deliveries which spiked the registration numbers in September. He said that there was some effect from the LTV rule.
“It is evident that the LTV rule has had a major impact on three-wheelers where volumes dropped from around 12,000 to 8,000 and mini trucks (Tata Batta) where volumes dropped from around 1,500 units to 1,000,” he added.
He noted that there is already a small drop in other categories due to the LTV cap announcement, but that a clearer trend could only be seen in coming months.
Jafferjee said that instead of the Central Bank intervening in free markets in an attempt to bridge the trade deficit, interventions in the form of carbon taxes and peak congestive charges should have been brought in to reduce traffic and pollution.
Motor car registrations increased to 10,288 from 2,587 YoY and down from 14,544 in September. Brand-new car registrations constituted 6,157 of the total compared to 632 YoY and 9,427 in September. Indian cars made up 89 percent of the brand-new market, with Maruti accounting for 5,224, increasing from 336 YoY and falling from 8,029 in September.
There were 4,131 pre-owned cars registrations, up from 1,955 YoY, but down from 5,117 in September. Toyota recorded 1,414 units with 710 Aquas and 415 Axios, Suzuki recorded 1,461 units with 1,401 Wagon R hybrids, and Honda recorded 650 units.
Premium brand registrations increased to 100 from 55 YoY and fell from 112 in September.
Mercedes Benz accounted for 34 brand-new and 28 pre-owned registrations with C-Class and E-Class units claiming an equal majority of the share, while BMW claimed 11 new and 11 pre-owned units.
Electric cars registrations continued their momentum, increasing to 529 from 12 YoY and 459 in September. Nissan Leaf claimed 506 units while six BMW i3s, eight Benz B Class and five Volkswagen E-golfs were also recorded. There were no Tesla registrations.
Registrations of SUVs fell down to 796 from 1,364 YoY and 890 units in September. Toyota registered 164 units with 141 Prados, Honda just 139, down from 1082 YoY during the Vezel boom, Mitsubishi registered 239 units with 172 Outlanders and 56 Monteros and 94 Nissans, 92 of which were X-trails.
All Mitsubishi, Honda and Nissan SUVs are pre-owned, and 40 percent of Toyotas are too.
Hybrid registrations increased to 3,964 from 2,962 YoY but down from 5,053 units in September.
“The largest drop was seen in the motor car segment where volumes dropped from 4,595 units to 3,533 units, the SUV and van segment are relatively smaller in number so no major impact coming from them,” Jafferjee said.
There were 1,041 van registrations, compared to 209 YoY and 1,336 in September with Toyota accounting for 366 units mainly through Hiaces and Suzuki claiming 366 registrations through minivans.
Two-wheeler registrations fell to 31,275 from 35,462 YoY but edged up from 30,289 units in September. Hero volumes increased 50 percent from September to 9,815 units, claiming market leadership with a 31.5 percent share mainly through Hero Pleasure registrations which doubled, while Bajaj volumes fell to 7,452 from 9,379 in September, losing the market leadership.
Bus registrations fell to 180 from 548 YoY and 239 in September.
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