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Informist, Monday, Mar. 3, 2025

 

By Anand JC

 

MUMBAI - Latest data show demand for automobiles continues to be weak across segments. An analysis of automobile wholesale sales of 10 listed companies shows they despatched 1.7 million units in February, nearly 1% lower from a year ago. Indeed, several automobile companies have reported growth in sales only because of robust growth in exports--not just in February but in the 11 months of the financial year so far.

 

Domestic despatches contracted 5.7% in February while exports grew just over 20% for these 10 companies. Exports accounted for around 22% of the units sold to dealers in February. For the month, nine of the 10 companies registered better performance on year in exports than they did in domestic despatches. Similar was the case with eight out of nine companies for Apr-Feb.

 

Automobile companies despatched 19.4 million units in Apr-Feb, up 7% on year. While domestic sales grew only 4.8% from the previous year, exports grew 18.3%. Calculation for Apr-Feb data excludes Hyundai Motor India Ltd., as historical data for the newly listed company are not available.

 

For the 10 listed auto companies, the ratio of domestic sales to exports in the first 11 months of 2024-25 (Apr-Mar) was roughly 82:18. For five of the 10 companies, exports contribute less than 10% to overall sales. For Bajaj Auto Ltd. the contribution is nearly 48%, while it is 31% in the case of TVS Motor Co. Ltd., and 19% for Hyundai Motor India. Notwithstanding the relatively lower contribution to overall sales, exports grew for all companies, barring Maruti Suzuki India Ltd., in February. In contrast, domestic sales contracted for five of the 10 companies.

 

Vahan registrations, which represent retail sales, fell 7% on year in February to 1.9 million units, which also shows the weak demand for automobiles.

 

CARS DISAPPOINT

In February, passenger vehicle despatches contracted for three out of four companies operating in the segment, with consumers' preference for bigger cars coming at the expense of growth in smaller cars.

 

Mahindra & Mahindra Ltd. continued to outperform its passenger vehicle peers, selling 50,420 sport utility vehicles in India in February, up 19% on year. Retail volumes of M&M were flat in February, while the passenger vehicle industry registered a decline of 11%, Emkay Global Financial Services said in a note Monday. "With a high base going ahead and no near-term ICE-SUV (internal combustion engine-based sport utility vehicle) launches, growth visibility is limited," the firm said.

 

Yet, in February, the company managed to take the crown of India's second largest carmaker for the first time from Hyundai Motor India. Hyundai Motor India sold 47,727 units locally. Overall, Hyundai Motor India's despatches contracted nearly 3% in February, with weak domestic sales weighing on overall performance. Domestic wholesale sales of Hyundai India fell nearly 5% on year in February while exports grew 6.8%. Domestic sales account for about 81% of Hyundai Motor India's total sales.

 

Wholesale sales by Maruti Suzuki, the country's largest passenger vehicle manufacturer, grew by 1% to 199,400 units in February, despite a high base. Maruti Suzuki's growth rate, however, slumped to a six-month low even as utility vehicles continued to show promise. While its domestic sales grew 3.5%, the company's exports fell 13.5% in February.

 

Tata Motors Ltd. was the worst performer in the segment. Its passenger vehicle sales fell 9% on year in February to 46,811 units. Despite constituting barely 1% of its overall passenger vehicle sales, exports of this segment by the company zoomed nearly seven-fold on year to 376 units in February.

 

SAVIOUR EXPORTS

It was a mixed February for two-wheeler companies. Two companies posted double-digit year-on-year growth in despatches while one tumbled in double digits and a fourth posted a low-single-digit rise.

 

Eicher Motors Ltd.'s motorcycle sales through the Royal Enfield brand emerged as the clear outperformer. Royal Enfield sales to dealers in February were 90,670 units, up 19.4% on year. Domestic sales grew 19% while exports grew just over 23%. For Royal Enfield, exports accounted for nearly 11% of overall sales.

 

The overall despatches by TVS Motor Co. in February were restricted to 403,976 units by weak domestic wholesale sales, but the impact was offset by robust growth in exports. The company's India sales grew only 3.5% on year while exports grew almost 27% to their highest ever.

 

Exports came to the rescue of Bajaj Auto as well. The company's domestic performance fell in double digits on year. But the 14?ll in domestic two-wheeler sales was offset by 23% growth in exports in the segment, resulting in a measly 1.6% overall growth to 352,071 units.

 

Hero MotoCorp Ltd. was the worst performer in the two-wheeler segment, as the company's overall sales fell 17.2% on year in February to 388,068 units. Domestic sales, which account for 92% of its overall sales, contracted nearly 20% even as exports grew nearly 33%. The company appeared to bolster its presence abroad as February marked the third straight month that it topped 30,000 units in global sales.

 

STILL WEAK

For commercial vehicles, a turnaround seems far away. "Industry MHCV (medium and heavy commercial vehicle) retails declined 10% YoY in Feb-25, similar to a flat-negative performance during the previous six months," Emkay Global said in its note.

 

The volumes of medium and heavy commercial vehicles continue to be weak. In February, the overall commercial vehicle despatches of Tata Motors declined 7% on year to 32,533 units, and those of Ashok Leyland fell slightly to 11,486 units.

 

"In our view, the limited infra/capex (infrastructure/capital expenditure) spends by the government continue to impact the near-term demand (for the segment)," Nomura Research wrote in a note late last week.

 

Sales of commercial vehicles by Eicher Motors under its joint venture with Volvo Trucks increased 9% on year to 8,092 units. While its domestic sales, which form 91% of its overall sales, grew 6%, exports galloped nearly 75%.

 

Sales of Bajaj Auto's three-wheeler commercial vehicles grew by barely 1% to 52,653 units. Unlike in the company's two-wheeler segment, where exports grew while domestic sales contracted, local wholesale sales of three-wheeler commercial vehicles in February grew while exports declined on year.

 

TRACTORS OUTPERFORM

The only segment that showed a glimmer of hope in February was tractors. M&M sold 25,527 tractors in February, up nearly 18%. The company expects strong demand for tractors in the coming months, driven by favourable weather.

 

Despatches by Escorts Kubota Ltd. grew 11.4% on year to 8,590 units in February, with strong demand in India and abroad. Its domestic sales grew 9.6% while exports increased 41%. The company's tractor sales registered growth in February after three consecutive months of decline.

 

Tractor companies registered a growth in wholesale sales despite industry retail sales declining around 16% on year in February, Emkay Global said.

 

"Demand across segments remains weak, except for tractors, where we expect dispatches to remain positive in the near term, driven by positive farm sentiment," Motilal Oswal Financial Services said in a note Monday.

 

The following table details company-wise automobile despatches to dealers in February.

Company	Feb-25	Feb-24	YoY Change (in %)	Feb-25 (Domestic)	Feb-24 (Domestic)	YoY Change (in %)	Domestic contribution to total (in %)	Feb-25 (Exports)	Feb-24 (Exports)	YoY Change (in %)	Exports contribution to total (in %)
Ashok Leyland	17,903	17,632	1.54	15,879	16,619	-4.45	88.69	2,024	1,013	99.80	11.31
Bajaj Auto	352,071	346,662	1.56	183,415	206,894	-11.35	52.10	168,656	139,768	20.67	47.90
Eicher Motors VECV	8,092	7,424	9.00	7,357	6,930	6.16	90.92	552	316	74.68	6.82
Eicher Motors Royal Enfield	90,670	75,935	19.40	80,799	67,922	18.96	89.11	9,871	8,013	23.19	10.89
Escorts Kubota	8,590	7,709	11.43	7,968	7,269	9.62	92.76	622	440	41.36	7.24
Hero MotoCorp	388,068	468,410	-17.15	357,296	445,257	-19.76	92.07	30,772	23,153	32.91	7.93
Maruti Suzuki	199,400	197,471	0.98	174,379	168,544	3.46	87.45	25,021	28,927	-13.50	12.55
M&M Auto*	83,702	72,923	14.78	80,641	71,384	12.97	96.34	3,061	1,539	98.90	3.66
M&M Farm#	25,527	21,672	17.79	23,880	20,121	18.68	93.55	1,647	1,551	6.19	6.45
Tata Motors	79,344	86,406	-8.17	77,232	84,834	-8.96	97.34	2,112	1,572	34.35	2.66
TVS Motor Co.	403,976	368,424	9.65	278,983	269,568	3.49	69.06	124,993	98,856	26.44	30.94
Hyundai Motor India	58,727	60,501	-2.93	47,727	50,201	-4.93	81.27	11,000	10,300	6.80	18.73
Total	1,716,070	1,731,169	-0.87	1,335,556	1,415,543	-5.65	77.83	380,331	315,448	20.57	22.16

*Includes data for Mahindra & Mahindra Ltd.'s utility vehicles, commercial vehicles, and 3-wheeler despatches

#Includes data for Mahindra & Mahindra Ltd.'s farm equipment despatches

 

The following table details company-wise automobile despatches to dealers in Apr-Feb.

Company	Apr-Feb FY25	Apr-Feb FY24	YoY Change (in %)	Domestic FY25	Domestic FY24	YoY Change (in %)	Domestic contribution to total (in %)	Exports FY25	Exports FY24	% change YoY	Exports contribution to total (in %)
Ashok Leyland	171,037	171,817	-0.45	157,332	161,513	-2.59	91.99	13,705	10,304	33.01	8.01
Bajaj Auto	4,281,143	3,985,029	7.43	2,566,211	2,494,330	2.88	59.94	1,714,932	1,490,699	15.04	40.06
Eicher Motors VECV	78,067	74,318	5.04	71,356	68,842	3.65	91.40	2,195	2,216	-0.95	2.81
Eicher Motors Royal Enfield	908,879	837,181	8.56	814,707	768,751	5.98	89.64	94,172	68,430	37.62	10.36
Escorts Kubota	104,180	104,508	-0.31	99,788	99,422	0.37	95.78	4,392	5,086	-13.65	4.22
Hero MotoCorp	5,349,583	5,131,040	4.26	5,101,672	4,961,275	2.83	95.37	247,911	169,765	46.03	4.63
Maruti Suzuki	2,041,282	1,948,127	4.78	1,741,665	1,690,952	3.00	85.32	299,617	257,175	16.50	14.68
M&M Auto*	857,221	756,526	13.31	826,655	733,436	12.71	96.43	30,566	23,090	32.38	3.57
M&M Farm#	389,707	352,362	10.60	374,512	340,250	10.07	96.10	15,195	12,112	25.45	3.90
Tata Motors	840,172	876,781	-4.18	821,655	858,193	-4.26	97.80	18,517	18,588	-0.38	2.20
TVS Motor	4,328,949	3,836,402	12.84	3,246,925	2,915,221	11.38	75.00	1,082,024	921,181	17.46	25.00
Total	19,350,220	18,074,091	7.06	15,822,478	15,092,185	4.84	81.77	3,523,226	2,978,646	18.28	18.21

*Includes data for Mahindra & Mahindra Ltd.'s utility vehicles, commercial vehicles and 3-wheeler despatches

#Includes data for Mahindra & Mahindra Ltd.'s farm equipment despatches

Apr-Feb data excludes Hyundai Motor India Ltd.

 

End

 

Edited by Rajeev Pai

 

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