August 2021 auto sales volume preview

CVs/2Ws to maintain a positive trend

PVs likely hit by supply issues

Tractors may see a mixed volume performance in the domestic market

Mumbai, August 30: Emkay Global Financial Services conducted a channel check to gauge the volumes’ estimate for the month of August. The auto sales for the month of August 2021 are likely to see positive momentum for commercial vehicles and 2-wheelers on a sequential basis. Volumes for passenger vehicles may see a hit, whereas tractors may see a mixed performance in the domestic market. Overall, the view on the auto sector is positive with top picks being Tata Motors (TP: Rs400), Ashok Leyland (TP: Rs155), Maruti Suzuki (TP: Rs 9,000), and Eicher Motors (TP: Rs 3,040). In ancillaries, the top pick is Motherson Sumi (TP: Rs300) and Apollo Tyres (TP: Rs305).

Commercial vehicles

CV industry volumes should improve sequentially and in comparison to 2019 levels, aided by healthy freight availability (over 2mn E-way bills generated per day) and better freight rates. Channel checks indicate that volumes are aided by Tippers, ICVs, and some replacement demand. Emkay Global expects a 2-year domestic volume CAGR at 10% (7% MoM) for Eicher Motors-Volvo Eicher Commercial Vehicles, 5% (10% MoM) for Tata Motors, 4% (9% MoM) for Ashok Leyland and 1% (-16% MoM) for M&M.


The 2-Wheeler industry volumes are likely to grow sequentially but may be lower in comparison to

2019 levels. Demand has been encouraging during the festive period (Eid, Onam). Emkay Global expect a 2-year domestic volume CAGR of -2% (+6% MoM) for Bajaj Auto, -5% (+10% MoM), for Hero Moto Corp Ltd, -7% for TVS Motors (+9% MoM) and -9% (+2% MoM) for Eicher Motor Royal Enfield. The launch of the new generation Classic 350cc on 1 September is expected to support order bookings ahead for Eicher Motor-Royal Enfield. Channel checks indicate some inventory build-up with dealers before the festive season in anticipation of higher volumes. Exports are likely to witness positive growth due to healthy demand and stable currency rates in key markets.

Passenger Vehicles

PV industry volumes should fall sequentially due to supply challenges but may improve in comparison to 2019 levels. The recent supply issues are due to higher Covid-19 cases in Asian countries that are part of the semiconductor supply chain. PV industry volumes are expected to be ~254,000 units, while retails are likely to be higher by ~10%. Emkay estimate a 2-year CAGR of 96% (-7% MoM) for Tata Motors, 5% (-29% MoM) for M&M and 3% (-27% MoM) for Maruti Suzuki in domestic volumes.


Tractors may see a mixed volume performance in the domestic market, with a 5% YoY decline likely for ESC and 4% YoY growth for MM. ESC is likely to see a volume decline due to the high base, a steep increase in vehicle prices, and some impact on customer sentiment due to monsoon deficiency, in our view.



Popular posts from this blog

कोल्हापूर फिल्म कंपनी 'विठ्ठल दर्शन' अभिनेते जितेंद्र जोशी सादरीकरण करणार