In December 2020, the automobile companies witnessed a decent uptick in wholesale volumes led by robust retail demand coupled with the favourable shift towards personal mobility.
However, the emergence of the divers’ trend in the broader segment continues to be a major obstacle. The sales of passenger vehicles (PV), two-wheelers and tractors rose while Commercial vehicles (CVs) segment witnessed a decline.
Based on December 2020 wholesale volume reported by Indian OEMs, tractors grew 35 percent YoY, passenger vehicles (PVs) grew 18 percent YoY and two-wheelers (2Ws) grew 7 percent YoY. Commercial vehicles (CVs) declined 3 percent YoY led by light CVs (-5 percent YoY), while heavy CVs were flat, according to CLSA estimates.
PVs and tractors continued their positive retail trends in December 2020 while 2Ws retail turned positive for the first time since March 2020.
Maruti Suzuki (+15 percent YoY) and Mahindra (+3 percent YoY) underperformed domestic PVs in December 2020 while Hyundai Motor (+25 percent YoY) and Tata Motors (+79 percent YoY) outperformed.
Royal Enfield (+35 percent YoY) and TVS (+13 percent YoY) outperformed domestic 2W volume in for December 2020 while Bajaj Auto (+4 percent YoY), Hero MotoCorp (+3 percent YoY) and Honda (+5 percent YoY) underperformed, according to CLSA.
Within CVs, LCVs saw a decline of 5 percent year on year while M&HCVs were flat in December 2020. Ashok Leyland (+14 percent YoY) outperformed while Tata Motors (-5 percent YoY) and Eicher Motors (-6 percent YoY) underperformed.
Mahindra's domestic tractor volume grew 23 percent YoY, while Escorts' grew 90 percent YoY in December 2020.
The tractor industry is expected to grow by 15-20 percent by FY21 end, said Bharat Madan, Group CFO, Escorts.
Speaking with CNBC-TV18, Madan said the outlook looks promising right now.
“The earlier pent-up demand which we have seen during the lockdown may not be there but we expect that at least for the next six months the double-digit growth should continue for the industry.”
For the remainder of FY21, CLSA’s current forecasts imply +56 percent YoY for LCVs, +33 percent YoY for 2Ws, +28 percent YoY for PVs, +13 percent YoY for tractors and -10 percent YoY for MHCVs.
CLSA said it prefers deep cyclical plays such as Tata Motors, Mahindra and Ashok Leyland among auto OEMs.
(Edited by : Abhishek Jha)
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