January 2023 auto sales preview: Double-digit growth seen in passenger & commercial vehicles; 7% YoY in 2-wheelers, says Emkay report

January 2023 auto sales preview: Passenger Vehicle (PV) volumes are likely to remain higher in January on healthy order book and ramp-up in production, an Emkay Global Financial Services report said. The research house remains positive on the auto sector and places its bets on Maruti Suzuki, Eicher Motor, Ashok Leyland, and Escorts.

The Commercial Vehicles (CVs) are likely to maintain their double-digit growth momentum on better freight availability, it noted, estimating a positive growth in 2-wheelers’ sales supported by festive season (Uttarayan) and marriage season demand.

Better customer sentiments and finance availability will likely improve tractor volumes as well, the Emkay Global report said.

 Source: Emkay Global Financial Services

Passenger Vehicles 

PV industry’s volumes should witness a 12 per cent YoY growth on account of a large order book and higher production. Dealer inventories are notably below normal levels, it said. Among OEMs, domestic volumes to grow by 55 per cent YoY for M&M, 10 per cent for Tata Motors, and 8 per cent for Maruti Suzuki.

Headwinds

Blended vehicle discounts have been reduced on MoM basis due to seasonality and remain lower than the peak levels seen in the past. Uncertainties remain on the supply chain, but production is improving in a staggered manner. 

CV Volumes 

CV industry’s volumes should grow by 13 per cent year-on-year with robust demand in both passenger and cargo segments, the report said. Transporters are buying trucks to get GST input credit and preponing purchases before the implementation of RDE/OBD2 norms.

Emkay Global expects 49 per cent YoY growth for Eicher Motor-Volvo Eicher Commercial Vehicles, 41per cent for Ashok Leyland, 6 per cent for Tata Motors, and 4 per cent for Mahindra & Mahindra (M&M) in the domestic market.

Two-Wheelers 

The 2-wheeler industry volumes are expected to improve 7 per cent YoY. Its channel checks indicate that demand in the festive season and marriage season aided 2-wheelers’ volumes in the latter part of the month.

“OEMs are going slow on dispatches as model-changeovers are happening due to OBD2,” the report said. Emkay Global expects domestic volumes to improve by 29 per cent for Eicher Motor-Royal Enfield, 16 per cent for TVS Motor, 8 per cent for Hero Moto Corp Ltd, and 2 per cent for Bajaj Auto.

Tractor Volumes 

Tractor industry’s volumes are likely to register strong growth of 13 per cent YoY on improving customer segments and better finance availability. Crop prices are better YoY in the wholesale market for rice, wheat, and tur dal, among others, it further added.

Emkay Global expects double-digit growth in domestic volumes, at 18 per cent YoY for Escorts and 15 per cent for M&M.

Maruti Suzuki shares today ended at Rs 8,825, up by Rs 87.50 or 1.00 per cent on the NSE while Mahindra & Mahindra stocks were higher by Rs 11.80 or 0.89 per cent from the Friday closing price at  Rs 1,332 apiece. Eicher Motors ended Monday at Rs 3,208, gaining 38.25 points or 1.21 per cent.

Closing Bell: Indian frontline indices S&P BSE Sensex and NSE Nifty50 not just ended their 2-day losing streak but also rebounded from 3 month lows on on Monday. While the Sensex closed at 59,500.41, up 169.51 points or 0.29 per cent, the broader market Nifty50 closed at 17,648.95, higher by 44.60 points or 0.25 per cent. The banking gauge Nifty Bank also managed a green closing at 40,387.45 finishing 42.15 points or 0.1 per cent higher.

In the 50-stock Nifty50, 29 stocks advanced with Bajaj Finance, Adani Enterprises, UltraTech Cement Company, Bajaj Finserv and Asian Paints ending as top gainers. The top losers were Power Grid, Bajaj Auto, IndusInd Bank, Larsen & Toubro and JSW Steel. 

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)