Moderate Growth Of Passenger Vehicles In February Reports Emkay Global

In an industry coverage report of Emkay Global on Automobiles for the month of February, the brokerage reported that there was mixed performance in auto volumes. The growth in Passenger Vehicle wholesales moderated to approximately to 11% on yearly basis, which reflects subdued retail trend, approximately is 8% as per Vahan portal

Within 2 wheeler space, among domestic retail sales a recovery of approximately 16% was seen and for wholesales the recovery of over 20% was exhibited on yearly basis. This growth was partly supported by low base, ABS-related supply-chain issues last year.

While exports of 2 wheeler players remained affected, but declined sharply by 40-52% year-on-year, with a likely revival during 1QFY24E. Among players, wholesale growth stood at 20% for Eicher Motors (Royal Enfield) and 10% for Hero MotoCorp Ltd, while it declined by 2% for TVS Motors Limited, an outlier with wholesale sales volume of over 15,000 and 11% for Bajaj Auto.

The electric-2 wheeler segment continued to witness consolidation, in terms of penetration levels. They were hovering at within 5 to 5.2% range on a monthly basis, major share was of original equipment manufacturers, which is rising. Absolute E-2W sales at 65,000 units and penetration was up 10bps MoM.

Medium and heavy commercial vehicle segment grew by 26 % over previous year and consistently it has grown with the range of 22 to 26 % over 3-months.

Medium and heavy commercial vehicle segment growth was healthy, supported by pre-buying ahead of BS-VI phase-2 norms which will be effective from Apr-23 along with associated price hikes.

Ashok Leyland continued to gain share, volumes grew by 27% YoY to 18,571 units, above our estimate of 17,500 units.

The tractor industry surprisingly was positive and grew roughly by 23-25% YoY growth. Growth in buses and 3 -wheelers rebounded strongly with the re-opening of the economy. Eicher Motors witnessed a growth in buses (+217%) and heavy-duty trucks (+74%).