Improved dispatches drive growth across segments
Auto wholesale numbers saw a strong start to 2025, with OEMs across segments reporting an 11.0% YoY increase and a 21.0% sequential rise in January. The gains were observed segment-wide, with recovery in CV volumes being the key highlight. PVs reported a mild uptick of 3.4% YoY while reporting a healthy sequential uptrend during the month supported by inventory refill, in an effort to normalize the inventory levels. For 2Ws, the trend continues, as HMCL and Bajaj report decline in sales, while Eicher and TVS continue to capture market share. The overall 2W wholesale number remained largely flat (+1.0%) on an annual basis, which could be attributed to lower demand from rural pockets. CVs recorded robust growth during the month, which was largely supported by an uptick in exports across OEMs and upbeat bus volumes. Tractors remained steady during the month, with M&M outperforming its peer – Escorts Kubota. Overall, January was positive for the automobile sector, with several OEMs reporting steady dispatches as they aimed to normalize inventory. Discount trends continue, with no signs reversal in the near future. As we move further into the new calendar year, we remain cautiously optimistic, with demand yet to materialize firmly and sustainably. However, the recent budget’s favorable tax structure is expected to boost demand for entry-level cars. Additionally, EV adoption is set to rise due to customs duty exemptions on key minerals and battery manufacturing goods, reducing production costs and positively impacting end prices.
Passenger Vehicles
In January 2025, the passenger vehicle (PV) segment delivered steady growth of 3.4% YoY, driven by inventory restocking. Within the segment, M&M led the way, while Tata Motors was the laggard. MSIL recorded a 6.5% YoY growth, with 2.12 lakh units sold, and utility vehicles (UVs) saw a 4.9% YoY increase. A key highlight for MSIL was the resurgence in compact car sales, particularly the new Dzire, marking the highest sales for this segment in over 29 months. The company’s dispatches were boosted by a low inventory level of nine days as of December 31, 2024, which has now increased to an expected 2-3 weeks. Tata Motors reported its wholesale number at 48.1k units (down 10.4% YoY), with a silver lining of gradual sequential recovery. Tata EV reported a decline of over 24% at 5.2k units. M&M continued to dominate the market, achieving a 17.6% YoY growth, driven by a robust order book. M&M began test drives for its EV-origin SUVs, BE6 and XEV 9E, on January 14, 2025, with bookings opening on February 14, 2025. Hyundai saw a 3% decline with 65.6k units sold; domestic volumes fell 5.4% YoY, while exports rose 10.5% YoY. Hyundai’s new Creta EV significantly boosted sales, reaching 18,522 units in January, marking its highest-ever sales. Toyota’s volumes grew 13% YoY in January 2025.
Two Wheelers
The two-wheeler (2W) market is showing signs of moderating growth, aligning with expectations given the high base in the second half of FY25. Despite weak domestic performance, exports remained strong with a 47.5% YoY growth. HMCL saw a slight decline in units sold, from 4.2 lakh to 4.1 lakh units. VIDA delivered 6,669 units of its newly launched VIDA V2 electric scooter. In January 2025, Hero MotoCorp introduced five new products across various segments, including the Xtreme 250R and Xpulse 210 motorcycles, as well as new scooters: Destini 125, Xoom 125, and Xoom 160. The company’s exports were a standout, recording 30.5k units (up 140.8% YoY), driven by strong demand in key global markets like Bangladesh. Bajaj Auto experienced a decline in domestic sales to 1.7 lakh units (down 11.4% YoY), while exports remained robust as demand in key markets improved. TVS saw a rise in monthly volume from 2.7 lakh to 2.9 lakh units, with significant growth in the scooter segment due to strong demand for the new Jupiter model. Exports for TVS also remained strong, recording a 45.7% YoY increase to 1.0 lakh units. Eicher continued its growth trajectory, marking its fifth consecutive month of volume growth. The company reported a 19.6% growth in domestic volumes and a robust 79.0% growth in exports, driven by improved demand and recent new launches. Eicher’s enhanced brand presence in global markets has bolstered its overseas performance.
Commercial Vehicles
In January 2025, the commercial vehicle (CV) segment showed a decent recovery in volume, with growth seen across OEMs, except for Tata Motors. This was mainly driven by an increase in replacement demand, a revival in infrastructure spending, and a low base effect. The uptick in CV volumes can also be attributed to dealers replenishing their inventory in anticipation of retail purchases, as new compliance-friendly models are introduced. Growth in medium and heavy commercial vehicles (M&HCV) remained largely flat, while light commercial vehicles (LCV) performed notably during the month. The bus segment continued to show resilience, supported by increased demand for public transport and replacement demand. The underlying demand drivers for M&HCV, including infrastructure spending and improving fleet demand, are expected to improve and support volume growth moving forward. Tata Motors reported muted demand (+0.9%) for heavy commercial vehicles (HCV), while demand for light and medium commercial vehicles (LMCV) and buses remained in the low and high teen digits. VECV saw a notable uptick of 20.1% in overall volumes, while Ashok Leyland reported modest growth of 4.7%, driven largely by increased demand in the bus and M&HCV segments. Exports remained strong for the industry, with Tata reporting a 31.5% increase in volume, while Ashok Leyland and VECV reported annual growth of 22.5% and 26.8%, respectively.
Tractors
In January 2025, the tractor industry exhibited high single digit growth YoY, which was largely driven by M&M and it continues to outperform its peers. M&M reported a mid teen digit growth on the domestic front, while maintaining a strong footing in exports market, on the back of improving demand from key markets like Bangladesh. Escorts, on the other hand, reported a decline on the domestic front, while exports exhibited robust growth, albeit on a lower base. The outlook for the industry remains resilient as retail demand continues to be strong, supported by strong rabi sowing, aided by high reservoir levels and sustained government support.
You might also Like.
Improved dispatches drive growth across segments Auto wholesale numbers saw...
Sector Outlook: Positive Strong PAT growth despite cost pressures Ambuja...
