NEW DELHI: December is ending on a muted note for the auto sector across the board, with sales growth for key segments likely to be around 1-3 per cent on a year-on-year basis, analysts said.
In two-wheelers, enquiries and footfalls remain below average and have disappointed dealers, who are seeing limited visibility on demand pick-up in the near term due to tepid consumer sentiments, Nirmal Bang said in a note.
“While personal vehicles (PVs) are witnessing a gradual month-on-month recovery, tractor dealers are indicating decline due to a high base. Commercial vehicles (CVs) are holding relatively well with demand recovery on MoM as well as YoY basis. While rising fuel prices and relatively cautious stance of financiers remain pain points in the CV segment, the dealers are confident about posting strong numbers in the coming quarters,” Nirmal Bang said.
Nomura India sees two-wheeler sales growing at 1 per cent as it said inventory levels remain elevated at 6-7 weeks. High vehicle prices and impending launches of several electric models are likely to have affected demand, it said.
Companies like Hero Motocorp have indicated further price hikes of up to Rs 2,000 from January due to rising commodity prices.
In the case of passenger vehicles, Nomura sees industry-wide volumes fall 1 per cent.
“We expect Maruti Suzuki’s domestic PV volumes (ex, Toyota and LCV) to be down 13 per cent YoY. The company’s overall volume is likely to be down 5 per cent YoY on higher exports,” it said.
The company’s CNG car demand remains strong; however, rising preference for SUVs remains a key near-term headwind, in our view. MM’s UV volumes will likely be up 25 per cent YoYon a low base and new launches,” Nomura said while expecting tractor volumes for M&M falling 4 per cent YoY on high base.
In the CV industry, Emkay said volumes are likely to improve, aided by strong demand for intermediate commercial vehicles (ICVs)/Tippers and a pickup in replacement demand for MAVs.
Emkay expects domestic volumes to grow at 11 per cent YoY for M&M, 8 per cent for Eicher Motor-Volvo Eicher Commercial Vehicles and 5 per cent for Tata Motors and a decline of 20 per cent for Ashok Leyland. The launch of CNG variants should support volumes ahead for Ashok Leyland, it said.
In the personal vehicle space, Emkay estimates domestic volumes to grow 30 per cent YoY for Tata Motors and 24 per cent for M&M, and a drop of 18 per cent for Maruti Suzuki. “Production is expected to further improve ahead with better chip supplies. Discounts remain low in comparison to the previous year, considering the robust order book,” it said.
In the two-wheeler space, Emkay expects domestic volumes to fall 15 per cent YoY for Eicher Motors-Royal Enfield, 13 per cent for Hero MotoCorp and 7 per cent for TVS Motor, while Bajaj Auto should see a slight growth of 5 per cent.
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