October marked the commencement of the festive period with the onset of the 9 day Navratri festival. As per FADA, Passenger Vehicles sales were much better than 2-wheelers in this 9 day festive period wherein 2-wheeler sales are estimated to have declined 15% YoY. While retail sales have been lower than estimated at the start of the festive season for 2-wheelers, 2-wheelers OEMs (Original Equipment Manufacturers) are aggressively pushing stock with dealers. Thus, if festive season demand does not pick up, one may see massive inventory correction post festive, in the 2-wheeler segment.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Passenger Vehicles (PVs) sales summary:

Maruti Suzuki reported the highest ever wholesale volume of 182448 units in Oct2020, 18.9% YoY growth. Growth was driven by compact segment (+27%) and Vans (+33%). For YTD FY21, Maruti volumes decline has narrowed to 27.1% YoY at 652,177 units. Mahindra and Mahindra’s auto segment sales declined 14.5% YoY to 44359 units. While UV sales were up 3% YoY, pick up segment sales declined 11.7% YoY. M&M tractor segment reported marginal growth of 2.5% YoY to 46558 units, largely in-line with Escorts Ltd tractor growth of 2.3% YoY to 13664 units. For YTD FY21, M&M tractor sale has grown at 0.9% YoY while Escorts is up 3.9% YoY. Domestic PV sales for Tata Motors grew strong 79% YoY to 23617 units.

Two (2-wheelers) sales summary:

Hero MotoCorp registered+35% YoY growth, with all time high wholesale volume dispatches of 806848 units. However, management had indicated that Navratri sales were down 4% YoY, this clearly highlights the massive inventory stocking that would have happened for Diwali festival. So, if Diwali sales don’t improve materially from here, one can expect sharp production cuts from Hero Motocorp in coming months.

Bajaj Auto reported a 10.5% YoY volume growth at 512,038 units. Overall Motorcycle grew by 18% YoY (led by 29% growth in exports and 11% growth in domestic sales). In domestic motorcycles, management indicated that Bajaj Auto has grown 3% YoY in this Navratri festival and that while they have substantially gained market share in 125cc and maintained share in >150cc segment, they did lose share in 100cc. Exports have grown at 25% YoY and momentum is likely to continue in November as well, before tapering in December. For TVS Motor’s total volumes increased 22% YoY to 394724 units on the back of +38% growth in motorcycles and +34% growth in mopeds, while scooters were up by 4.7% YoY. Royal Enfield sales continued to disappoint and were down 7% YoY (+11.4% MoM) to 66891 units. Royal Enfield is now the only player which is still facing supply constraints.

See Zee Business Live TV Streaming Below:

Commercial Vehicles (CVs)

CV sales continue to ramp up MoM for Ashok Leyland, total CV sales grew 1.3% YoY. While MHCV sales were down 11% YoY, LCV sales grew 14% YoY. Similarly, for Volvo-Eicher (VECV), CV sales posted growth of 12% YoY. For Tata Motors, CV sales reported 2% YoY growth to 28472 units led by growth across segment Passenger Carriers (-56% YoY) .