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Informist, Friday, Feb. 28, 2025

 

MUMBAI – Indian automobile companies are likely to report a muted growth in wholesale volumes for February due to increased discount-led pre-buying in December and price hikes in the first two months of 2025, Nomura Equity Research said in a report Thursday. The weakness in demand during February has come as a negative surprise, the brokerage said.

 

The passenger vehicle and tractor segments are expected to post a 2% and 11% on-year growth, respectively, in February, whereas sales of two-wheelers and medium and heavy commercial vehicles is expected to fall 6% and 8% on year, respectively. Sales of passenger vehicles rose 1.6% on year in the previous month to 399,386 units, whereas that of two-wheelers and three-wheelers rose 2.1% and 7.7%, respectively, to 1.53 million and 58,167 units.

 

Passenger vehicle wholesale for February is projected at 380,000 units against 370,786 units a year ago. Given the slowdown in demand, the brokerage said it sees discounts rising from March onwards. Demand pressure has led to further increase in the channel inventory to over 40 days of the February retail run-rate, Nomura said, and added that dealer's margins have also come under pressure compared to a year ago. Nuvama Institutional Equities expects a 5% on-year rise in the domestic passenger vehicle sales. Growth is expected to be better in the north and west regions compared with east and south, Nuvama said.    

 

While Maruti Suzuki India Ltd. and Mahindra & Mahindra Ltd.'s domestic passenger vehicle wholesale volumes are seen rising on year, Tata Motors Ltd.'s volume is expected to fall in February. Maruti Suzuki's passenger vehicle wholesale volumes in India are expected to have increased 1% on year to 162,000 units in February, while exports are seen up 4% to 30,000 units, Nomura said. However, the wholesale market share of the company would have likely cotracted 80 basis points from the previous month to 42.7%, and its retail market share is expected a 39.8%.

 

M&M's utility vehicle sales are expected to have risen to 49,000 units, up 16% on year on the back of ramp-up in production of newly launched electric vehicles, and Thar ROXX and XUV 3X0, the research firm said. The newly launched BE 6 and XEV 9e have received over 30,000 bookings on the first
day.

 

Tata Motors' passenger vehicles domestic sales for February is seen down 10% at 46,000 units, whereas Hyundai Motor India Ltd.'s domestic sales for the month is expected to be flat on year at 50,000 units. However, Hyundai Motor's overseas despatches is seen up 2% on year in February, Nomura said. On the other hand, Nuvama expects Hyundai to post a 2% growth in sales for the month.

 

TWO-WHEELER AND THREE-WHEELER

Despite higher discounts by some original equipment manufacturers, wholesale volumes for two-wheeler segemnt is seen down 6% on year at 1.4 million in February. Apart from wholesale, registration are also down at 12%, Nomura said. The segment's exports is seen up in double digits due to growth in Latin America and African markets, Nuvama said in its report.

 

Bajaj Auto Ltd. is expected to post mixed sales growth as strong growth in two-wheeler exports is partially offset by a fall in domestic two-wheeler sales. The company's domestic two-wheeler sales is seen down 9% on year at 155,000 units, whereas the segment's exports is expeceted to rise 24%, according to Nomura's report. The Pune-based company would have likely registered a 2% growth each in its domestic and overseas three-wheeler despatches, the brokerage said. Overall, the company is expected to post a 4% on-year increase in its total wholesale volumes for February at 362,000 units.

 

Nomura said Eicher Motors Ltd. would have likely sold 89,000 Royal Enfield motorcycles in February, up 17% on year, whereas Hero MotoCorp Ltd.'s sales would have likely fell 12% on year during the month to 410,000 units. TVS Motor Co. Ltd., on the other hand, is expected to post a 1?ll in its domestic sales of 267,500 units. The company's exports are seen up 9% for the quarter at 108,000 units. M&M's three-wheeler wholesale volumes for the month is seen up 22% on year. 

 

COMMERCIAL VEHICLES

Limited infrastructure-related activities and capital expenditure spends continue to impact near-term demand for commercial vehicles, Nomura said. The segment's registrations are also seen down 11% on year in February. Ashok Leyland Ltd.'s total wholesale volumes are expected to fall 3% on year to 17,000 units in February. Tata Motors' total commercial vehicles wholesale volume is also seen down 9% on year to 30,500 units in February. 

 

While higher on-year electronic way bill indicates better freight availability for transporters, selective financing by lenders and reasonable levels of fleet utilisation, are limiting new vehicle additions, Nuvama said. The brokerage expects the industry to post a flat on-year domestic sales growth in February.

 

TRACTORS

The tractor segment is expected to report a strong sales growth of 11% for February on the back of positive rural prospects due to improved crop prices and good reservoir levels, Nomura said. The research firm expects M&M's tractor volumes to increase 9% on year in February to 23,700 units. Nuvama, on the other hand, expects Escorts Kubotoa to post a 5% on-year rise in tractor sales to 8,100 units in February.  End

 

Reported by Aman Aryan

Edited by Deepshikha Bhardwaj

 

 

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