Lacklustre growth on high base; Exports fared better
In March 2024, the car industry saw mixed results: passenger vehicles (PVs) did well, especially utility vehicles (UVs), but commercial vehicles (CVs) and tractors didn’t do as good because of the election year and other reasons.
Car sales overall didn’t meet what people thought they would, except for CVs. Car sales went up by 9% from last year, mainly because of UVs. Two-wheeler (2W) sales inside the country dropped by 2% due to the Navratra festival happening later, but sales to other countries went up by 30%. CVs saw a 5.5% drop, with heavy trucks down by 8.5% and light trucks by 1%.
Tractor sales fell by 24% because of not-so-good feelings in farming and the festival timing. Looking ahead, the 2W sector might grow the most in the next financial year, especially bikes over 125cc. Cars and trucks might see a small growth, and tractors will grow a little after adjusting for the previous drop.
Passenger Vehicles
In March 2024, the car market in India did well, especially the part that sells utility vehicles (UVs), which saw a huge 26% increase in sales. Overall, car sales went up by 9% compared to last year, thanks to people liking UVs more and companies stocking up before the Navratra festival.
However, the actual sales in stores went down a bit. Some big car makers, like Maruti Suzuki (MSIL) and Tata Motors, might have more cars in stock than usual, especially cheaper models. Still, Maruti Suzuki’s sales went up by 15% because they sold a lot of SUVs, even though they sold fewer sedans. Tata Motors and Mahindra & Mahindra (M&M) also saw their sales go up.
Tata Motors is doing really well with electric cars (EVs) and cars that run on compressed natural gas (CNG), with sales in these areas growing much faster than the overall car market. They expect this trend towards cleaner cars to keep going, which could change what kinds of cars people want to buy. Looking forward, they think the car market will grow a little bit next year, with even bigger increases for eco-friendly cars.
Two Wheelers
In March 2024, two-wheeler (2W) sales in India had mixed results, with a 7% increase from last year but still not meeting the high expectations for some brands, mainly because last year’s sales were already high. However, sales to other countries jumped by 30%. Overall, 2W sales for the year grew by 9%.
The growth slowed down a bit because the Navratra festival was moved to a later date. Electric two-wheeler (EV 2W) sales, on the other hand, shot up by 61% because people were buying them before expected cuts in government support. While Hero MotoCorp (HMCL) saw a 6% drop in sales, TVS Motors and Bajaj Auto did really well, with 12% and 25.5% increases, mainly thanks to strong domestic demand and good sales abroad.
Royal Enfield’s sales were up by 5%, driven by a rise in domestic sales, despite a drop in sales abroad. TVS Motor’s electric model, iQube, hit record sales in March, even as they prepared for changes in EV incentives. The electric vehicle market is getting more attention, especially after Ola cut prices, shaking up the market. Future growth looks promising with stable incomes and normal discount levels, though exporting could face challenges, like higher shipping costs due to problems in the Red Sea area.
Commercial Vehicles
In March 2024, the commercial vehicle (CV) market in India saw a decrease in sales, dropping by about 8.5% for heavy and medium-sized vehicles (MHCV) and 1% for light commercial vehicles (LCV) compared to last year. This drop is partly because many people bought vehicles in March 2023 before new stricter emission rules started.
Over the whole year, MHCV sales went up slightly by 3%, but LCV sales fell by 4%. Big companies like Tata Motors, Ashok Leyland, and VE Commercial Vehicles all sold fewer vehicles than they did last year. Tata Motors especially saw a big decrease in truck sales but sold a lot more buses. The slowdown in the latter part of the year is being blamed on state elections and the anticipation of national elections.
Demand for vehicles related to cement, oil & gas, and construction is expected to be low until the second quarter of the next financial year, with the national elections also causing people to hold off on buying. Bus sales are doing okay, though, and big companies are getting discounts. With inventory levels indicating that sellers have about 4-5 weeks worth of vehicles on hand, it shows that people are being careful with their purchases due to uncertain political and economic situations.
Tractors
In March 2024, the tractor industry in India saw a big drop in sales by more than 15% compared to last year. This happened mainly because the Navratra festival was moved to a later date and there were delays in harvesting. Big companies like M&M and Escorts saw their tractor sales go down by 26% and 17%, respectively. While demand from farmers is expected to drop a bit but stay pretty steady, demand for commercial use is predicted to fall sharply.
The buildup of tractor stocks for the Navratra festival began late in March, so it didn’t really help March’s sales. Right now, there are about 35-40 days worth of tractors waiting to be sold.
Worries about unpredictable weather and low water storage might keep farmers cautious. However, the outlook for the next few months is still positive, thanks to expectations for a good harvest season, better earnings for farmers, and government help.
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