India’s automobile industry is set for broad-based growth in December, with sales volumes expected to increase across all major vehicle categories, according to a report by Nuvama Institutional Equities.
The brokerage said domestic volumes for two-wheelers, passenger vehicles and commercial vehicles are likely to register double-digit growth, supported by improving affordability, new product launches and easier access to financing.
Nuvama said continued positive customer sentiment, aided by GST rate cuts, interest rate reductions and adequate finance availability, is supporting vehicle purchases. While rural demand remains under some pressure due to lower crop retail prices, the overall outlook remains positive.
Two-wheelers to lead growth
In the two-wheeler segment, domestic industry volumes are expected to grow around 22 per cent year-on-year. TVS Motor is projected to outperform peers, with volumes rising 29 per cent to about 415,000 units.
Eicher Motors’ Royal Enfield and Hero MotoCorp are also expected to post strong growth of 26 per cent and 23 per cent, respectively, despite muted rural sentiment.
Passenger vehicles see strong momentum
Passenger vehicle sales, including cars and SUVs, are forecast to grow 21 per cent in the domestic market. Mahindra & Mahindra and Maruti Suzuki are expected to lead the segment.
Mahindra’s automotive volumes are estimated to rise 29 per cent to 90,000 units, while Maruti Suzuki is seen growing 23 per cent to around 220,000 units.
Hyundai’s domestic volumes are expected to increase 9 per cent to about 60,000 units.
To stimulate demand, manufacturers have increased discounts, with some brands offering higher year-on-year incentives, particularly on electric vehicles, the report noted.
Commercial vehicles and tractors
Domestic commercial vehicle volumes are projected to grow 17 per cent, supported by improved freight availability driven by higher consumption demand and a shift from used to new vehicles.
Tractor sales are expected to rise about 14 per cent, aided by better affordability following GST rate cuts and support from the Maharashtra state subsidy scheme.
Exports across vehicle categories are also expected to grow at a double-digit pace, led by rising demand in Asia, Africa and Latin America.
“Our analysis shows TVS Motor and Royal Enfield would lead peers in two-wheelers, while Mahindra & Mahindra and Maruti Suzuki are likely to outperform among passenger vehicles,” Nuvama said, adding that it maintains a constructive outlook on the automobile sector.
