June Automobile's Retail Sales | PV and CV sees growth, 2-Wheeler's still in trouble

The Indian automobile sector as a whole had a modest comeback on June 22. Despite a shortage of semiconductors, the Passenger Vehicle (PV) industry recorded volume growth while the demand was still strong. The domestic 2W market is still having trouble, although future growth is likely to be slow. The lower base, stronger infrastructure spending, and increased freight transit across India were the primary drivers of the CV segment's growth, but the Tractor segment's performance improved from the preceding months.

In June 2022, industry Passenger Vehicles sales improved year on year. Passenger vehicles continue in high demand, and a clear rebound may be witnessed in light of the semiconductor issue. In the future, a quicker volume rebound is expected in the segment.

Industry 2-Wheeler sales increased QoQ in June 2022, driven by strong rural demand and the wedding season. Even so, the recovery is tardy since the economy is still working to return to pre-pandemic levels.

The improvement in industry Commercial vehicle sales in June 2022 on a year-on-year basis was mostly the result of a reduced base, the opening up of the economy, a resurgence in freight transportation, and an uptick in building activity. In the future months, a solid volume increase is expected.

On a QoQ basis, the industry's tractor sales increased in June 2022. In the upcoming months, consistent volume growth underpinned by a favorable monsoon season is expected.

Automobile Companies Monthly Sales Update:

1. Maruti Suzuki:

The Mini sector for Maruti Suzuki shrank by 17 percent YoY and MoM to 14.4k. Sales of the Compact increased by 13% YoY and 14% MoM to 77.7k units. To 1,507 units, the Mid-Size segment saw a 150 percent YoY growth. At 125.7k units, domestic sales were flat year over year. Maruti Suzuki's overall sales have increased by 25% since the pre-pandemic month of June-19.

2. Mahindra & Mahindra:

Sales of the Mahindra & Mahindra UV grew by 60% YoY to 26.6k units. Sales of commercial vehicles climbed by 61 percent year over year to 20.4k units. Domestic sales for the Total Auto segment rose to 51.3k units, up 69 percent YoY. M&M's Passenger Vehicle Sales are up 43% from the pre-pandemic June-19 month. The Thar, XUV 300, Bolero Neo, and Bolero Pick-up models from Mahindra & Mahindra have a strong order book. Customers seem to like the XUV700. The just-introduced Scorpio-N in June 2022 is expected to perform well.

Domestic FES sales totaled 39.8K units, down 15% year over year and up 17% month over month. In FY23, the industry is predicted to rise by a single-digit percentage. FES's overall sales are up 27% from the month of June-19 in the pre-pandemic period.

3. Escorts:

Escorts Domestic sales totaled 9,265 units, up 21% month on month but down 23% year on year. Escorts' overall revenues have increased by 12% since the pre-pandemic month of June-19. The Company anticipates that in the upcoming quarters, demand for tractors will be driven by strong farmer sentiment, supported by favorable macroeconomic circumstances, reasonable reservoir water levels, a solid pace of Kharif sowing, and continuing government support for agribusiness.

4. Hero MotoCorp:

Hero MotoCorp’s domestic sales increased by 6% YoY to 461.4k units. The Exports sales decreased by 29% YoY to 21.6k units. The Total Sales increased by 3% YoY and 22% MoM to 484.8k units.  Although the recovery seen on a sequential basis was led by some uptick in rural markets and wedding season, Hero MotoCorp’s total sales compared to the pandemic month of June-19 are lower by 21% indicating a slowdown in the recovery. 

5. Bajaj Auto:

Domestic motorcycle sales at Bajaj Auto fell by 20% YoY and jumped by 30% MoM to 125.0k units, whilst export motorcycle sales rose by 23% YoY to 190.8k units. To 31.0k units, the Total 3W grew 18% MoM and fell 13% YoY. Total sales were unchanged year over year but rose 26% month over month to 347K units.

Even though the domestic and export markets have progressively improved, the total 2W sales for Bajaj Auto are down 10% from the pre-pandemic month of June-19.

6. TVS Motors:

The Motorcycle Sales flat YoY to 146.0k units. The Scooter sales increased by 93% YoY and to 105.2k units. The 3W Domestic Sales increased by 7% YoY to 14.7K units. The Total Sales increased by 23% YoY to 308.5K units.

When compared with the pre-pandemic month of June-19, TVS's total 2W sales are up by 4%, ahead in terms of recovery when compared with peers. The company is well placed with its robust motorcycle and scooter portfolio to meet the demand for personal mobility.

7. Eicher Motors:

Royal Enfield Domestic Sales increased by 40% YoY to 50.2k units. The Total Sales increased by 43% YoY to 61.4k. VECV sales increased by 159% YoY and 12% MoM to 6,307 units. When compared with the pre-pandemic month of June-19, RE total sales are higher by 5% indicating signs of growth. 

8. Ashok Leyland: 

 The Domestic sales increased by 130% YoY and 8% MoM to 13.4K units. M&HCV Goods segment increased by 16% QoQ to 7.7k units. The Domestic LCV segment decreased QoQ by 2% to 5.0k units. Total sales increased by 10% QoQ to 14.5k units.  Ashok Leyland has been focusing on LCV and Export market to garner incremental growth. With the pickup in the construction activities and strong Govt. In infra push, the demand for tippers and trucks is expected to inch up.