October auto sales preview: Expect weakness in sales across industry
October auto sales numbers will come out on Monday. The month of has been a weak one for the auto sector and there will be a weakness in sales across the industry.
October auto sales numbers will come out on Monday. The month has been a weak one for the auto sector and weakness is expected in sales across the industry.
For the passenger vehicle industry, the semiconductor shortage has led to a big production hit and that overall has led to wholesale sales being under pressure.
Maruti Suzuki in an earlier interaction with CNBC-TV18 said that Navaratri sales this year were 40 percent lower for the industry compared to last year.
In the two-wheeler space, it is more of a demand issue, especially the mass market 100 CC segment has been hit very hard because of rural demand being under pressure and no recovery in income levels post the COVID-19 situation. So, on average, the two-wheeler industry is expected to see a fall of almost 21 percent year-on-year.
The only space that has seen a little bit of momentum is the medium and heavy commercial vehicles. There, it is the low base effect that has also helped the year-on-year growth. Within the MHCV space, Tata Motors will report a healthy 20 percent growth year-on-year although Ashok Leyland could see a fall of 10 percent.
However, the bigger damage is felt in the passenger vehicle space. Both Maruti and M&Ms auto divisions will see a cut of anywhere between 30 to 35 percent year-on-year. In fact, M&M’s tractor segment has been under pressure for a second consecutive quarter on the back of an erratic monsoon and no recovery in rural demand.
On average, the two-wheelers space will see about a 15 to 30 percent fall for Bajaj Auto, Royal Enfield, as well as Hero MotoCorp. TVS Motors as well could be slightly on the better side purely because of its exposure to the export market.
So, all in all, October could be a weak month for the auto sector.
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(Edited by : Kanishka Sarkar)
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