Passenger vehicle sales are expected to be robust in July, driven by a large order book and production ramp-up, while commercial vehicle volumes may remain in an uptrend, a report said on Thursday.

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However, tractor volumes are likely to decline due to a high base and uneven spread of the monsoon, according to brokerage firm Emkay Global Financial Services, which has retained a positive view on the auto sector.

Emkay Global also expects an improvement in two-wheeler sales on the back of higher production and inventory build-up with dealers.

Passenger vehicle segment should witness a robust growth on a large order book and production ramp-up, with automakers such as Tata Motors, M&M and Maruti Suzuki expected to log 49 per cent, 28 per cent and 8 per cent volume growth, respectively, in July, the brokerage firm said.

For the two-wheeler segment, the brokerage estimates a 35 per cent improvement in domestic sales for Eicher Motor-Royal Enfield, 6 per cent each for TVS Motor and Hero MotoCorp.

Bajaj Auto is likely to see a 2 per cent improvement in the domestic two-wheeler volumes in the month, Emkay Global said.

In the previous month, the passenger vehicle domestic sales grew 19.06 per cent year-on-year at 275,788 units. Two-wheeler sales during this period surged 23.4 per cent to 13, 08,764 units over the same month last year, while three-wheeler sales rose 184 per cent year-on-year to 26,701 units, as per SIAM (Society of Indian Automobile Manufacturers) June data.

Commercial vehicles should remain in an uptrend, with robust growth in passenger and cargo segments. E-way bill trends indicate better freight availability compared with last year, Emkay Global said.

The brokerage firm said it expects a positive 58 per cent year-on-year growth in domestic sales for Ashok Leyland, 55 per cent for Eicher Motor-Volve Eicher Commercial Vehicle, 42 per cent for Tata Motors, and 13 per cent for M&M in the domestic market.

Tractor volumes are likely to decline due to a high base and uneven spread of the monsoons, it said and added that it expects a 13 per cent decline in domestic volumes for M&M and 16 per cent for Escorts.