The Update on how have auto mobile sector performrd in November.
Table of Contents
Festive tailwinds subside: Outlook remains cautious
In November, the auto wholesale sector saw mixed performance, with YoY growth but a sequential decline due to festive timing differences. The PV segment grew 6.5% YoY, driven by healthy exports, exceeding muted market expectations. Inventory levels stayed at 4-7 weeks. 2Ws faced a slight decline as post-festive demand rebounded weakly, impacted by reduced OEM discounts. CVs showed a marginal 1% gain, with buses performing well, while HD vehicles lagged due to lower freight availability and cash flow pressures from delayed government payments. The near-term outlook remains cautiously optimistic, with anticipated strong retail demand for 2Ws and PVs, supported by positive rural sentiment and crop yields. However, potential challenges like inventory overstock and economic headwinds may affect momentum. CV dealers remain wary due to slow construction activity and financial constraints. Discounts are expected to remain targeted rather than broad-based, with concerns over delayed purchases for year-end offers.
Passenger Vehicles
In November 2024, the domestic PV industry saw mid-single-digit growth in wholesale volumes, supported by sustained post-festive demand, discounts, and new model launches. MSIL posted a 10.4% YoY growth (181.5k units), driven by strong exports and UV performance, while Tata Motors grew modestly by 2% YoY (47.1k units), surpassing expectations despite struggles in EVs and international markets. M&M recorded a 16% YoY increase (46.2k units), fueled by strong UV demand and new EV launches, though some portfolio cannibalization is expected. Hyundai saw a 7% YoY decline but aims to recover with improved rural contributions and a better CNG mix. Discounts moderated during the month but are likely to rise by year-end to address inventory and prepare for new releases.
Two Wheelers
In November 2024, the 2W sector saw a 1% YoY domestic decline but strong export growth of 27.8% YoY. Bajaj and Hero faced declines, while TVS and RE reported healthy sales. Hero’s sales dropped 7.7% YoY, impacted by rural demand weakness and cannibalization of models. Bajaj saw a 7% YoY dip but robust exports. TVS grew 10.2% domestically, with strong demand for new models like Jupiter 110 and Raider variants, and 25% YoY export growth. RE grew 2.5% YoY, driven by domestic and export demand. In the e2W market, Ola Electric led with a 25% share, followed by TVS (23%) and Bajaj (22%).
Commercial Vehicles
In November 2024, the CV segment saw a slight rise in wholesale volumes despite weak retail demand, reduced fleet utilization (65-70%), and lower freight availability in sectors like construction and agriculture. Ashok Leyland’s domestic volumes fell 4.3% YoY due to weak M&HCV and LCV sales, though buses remained strong. VECV reported 5.7% YoY growth, led by buses, while M&M grew 4.5% domestically and 65% overseas, driven by 3W and LCV sales. Tata Motors saw a 1% domestic decline and flat exports. CV OEMs anticipate recovery in H2FY25 with better freight movement, resumed construction, and economic growth.
Tractors
The tractor segment showed a mixed performance in November 2024. M&M reported a 2.2% YoY growth in domestic volumes and a strong 62.4% growth in exports, while Escorts saw an 8.1% YoY decline domestically and a 39.5% drop in exports due to reduced subsidies. Overall wholesale volumes were flat, impacted by the lack of festive demand and monsoon deficiencies in the East. The outlook remains positive, supported by good rainfall and increased MSPs, which are expected to boost farmer incomes.
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