NEW DELHI: Wedding bells sounding across the country are helping two-wheeler makers regain their mojo and recover sales during April, analysts tracking the auto sector said. Along with that improving rural income also supported the demand.
“Our interaction with leading industry channel partners indicates a recovery in two-wheelers (2Ws) owing to the marriage season and improved cash flows in the hands of consumers due to the harvesting of the Rabi crop,” said Jinesh Gandhi, Research Analyst at Motilal Oswal.
Analysts said internal combustion engine (ICE) scooter sales also got a boost after several electric scooters caught fire across the country, making riders sceptic of them.
Increasing farm income is also helping tractor volumes grow. “Apart from the low base of last year, tractor volume growth is likely to be driven by improvement in farm income and some preponed purchases due to expected price hikes,” said Raghunandhan NL of Emkay Global.
Sales in the passenger vehicle segment are also likely to be better. PV dealers remain upbeat on the back of strong demand, said analysts, but supply chain issues are impacting supplies from automakers. Demand for M&HCVs continues to benefit from the rise in infrastructure activity and high capacity utilization, though there has been some impact from higher fuel prices.
Tractors: Emkay sees robust growth owing to improving retail and inventory filling by OEMs. It expects domestic volumes to grow by 26% YoY for Mahindra & Mahindra and 11% for Escorts. However, Motilal said demand continues to remain muted, with some recovery expected after the Rabi crop harvest.
Two-wheelers: Emkay expects domestic volumes to grow by 52% YoY for TVS, 21% for Eicher Motors and 21% for Hero Moto. Improvement in Royal Enfield’s supply chain is helping to improve its sales, said Motilal, adding Classic 350 and Meteor still have a waiting period due to an improvement in demand.
Passenger vehicles: Supplies from the OEMs were again impacted by the supply chain in April 2022 after recovering in H2FY22, said Motilal Oswal adding CNG continues to remain the preferred fuel and launches are further sweetening the value proposition. Emkay said the segment should witness robust growth on a low base. Among OEMs, it estimates domestic volumes to grow by 59% Yoy for Tata Motors and 50% for M&M, while it expects an 8% fall for Maruti Suzuki.
Commercial vehicles: Emkay said commercial vehicles should remain in an uptrend owing to better demand for both passenger/cargo vehicles and the low base effect. It expects domestic volumes to grow by 138% YoY for Eicher Motors-Volvo JV, 87% for Tata Motors, 51% for Ashok Leyland and 35% for M&M.
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According to ETAuto Research, India has an installed automobile capacity of about 35.5 million units while only 22.9 million automobiles were produced in FY22. Only about 3.6 million passenger vehicles were produced against the installed capacity for over 7 million units.