August auto sales estimates: Expect weak numbers due to semiconductor shortage impact on production

Auto sales report for the month of August will be out on September 1. The numbers are expected to be on the weaker side because of semiconductor shortage that will impact the production.

The semiconductor shortage has hit the four-wheeler space, mainly the passenger vehicles (PV) space quite a bit. Also, two-wheeler retails have been under pressure this time around because of high ownership and insurance costs and a high inventory of nearly six-weeks or so.

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The only segment where there has been an improvement is the commercial vehicle (CV) space because freight rates have picked up, and also due to an improvement in construction activity as the economy has picked up.

Apart from that,  two-wheeler companies like TVS Motor and Bajaj Auto will benefit because export market has opened up.

The factor that will prevent overall pickup in the two-wheeler sales is the higher electric vehicle (EV) sales, which has dampened demand for the internal combustion engine (ICE).

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According to CNBC-TV18’s poll, for players like Maruti Suzuki India, Bajaj Auto etc, it will be nearly 2-7 percent gain that has been seen year-on-year (YoY). The space that will do well is the CV space. So for Ashok Leyland and Tata Motors, 43-51 percent of YoY gain in sales is expected. For Mahindra and Mahindra (M&M), nearly 31 percent gain is expected. Hero Motocorp could be under pressure because rural demand has been hit. So, Hero is expected to see a fall of 15 percent YoY. Eicher Motors’ Royal Enfield sales are expected to be under pressure.