All eyes on two-wheeler sales trends ahead of June auto number

Auto sales for the month of June will be released on Friday. While the sector is expected to see strong wholesale sales, especially for segments like passenger vehicles and commercial vehicles, two-wheelers continue to be under pressure.

The passenger vehicle space has done very well in the month of June, there were a slew of new launches, and there was an easing of the chip supply issue as well. All of that has led to very good demand in the passenger vehicle space, which is expected to see double-digit growth in June.

Even the commercial vehicle space has done quite well this time around. There has been pent-up demand, the freight rates have firmed up and there has been a pickup in infrastructure activity, and that has aided commercial vehicle demand.

The only space that has not recovered up until now is the two-wheeler space. In fact, there is a decline of 10 to 15 percent month-on-month as the marriage season demand has peaked.

Tractor segment — there is an improvement but with this deficiency in the monsoon that remains to be a big concern whether the improvement is something that can sustain.

The big risk to watch is the fact that until the 27th of June, the all-India average monsoon was down 10 percent if that continues then that perhaps could derail the rural sector even more.

According to Nomura — in the commercial vehicle space Ashok Leyland and Tata Motors is expected to see anywhere between 70 to 100 percent year-on-your rise compared to June of last year.

Moving on to the passenger vehicle space, Maruti is expected to see about a 10 percent growth on a year-on-your basis, while M&M Auto has done exceptionally well. They have had a slew of successful launches like the M&M XUV 700, and Thar and that will aid their numbers this time around. The tractor segment for M&M has been under pressure as the deficient monsoon has hit demand.

In the two-wheeler space, there are different problems that different companies are facing. So for Bajaj Auto, the numbers are expected to be poor because the management said that exports are getting hit for them as markets like Egypt have gone ahead and banned three-wheelers which have hit their numbers quite a bit.

For Hero MotoCorp, the slowdown in the rural segment is something that will give them just about a single-digit growth and for Royal Enfield, it will be the best of the lot though there has been a good pickup over there. TVS Motor Company also has been steady with about a 21 percent growth.