Auto gross sales figures for August have been blended. Progress in passenger automobile gross sales throughout the month was affected by the chip scarcity, regardless of sturdy demand for private mobility. Tractor gross sales progress additionally slowed as a consequence of weak shopper confidence, whereas gross sales momentum for two-wheelers has but to select up. The one constructive level was the industrial automobile phase the place the restoration is accelerating.
The expansion in gross sales of business autos was stimulated by the opening of the financial system after the closures. Higher freight availability and improved freight charges additionally contributed to the restoration. Analysts say additional enchancment might be seen on the finish of the monsoon season.
Tata Motors Ltd’s CV gross sales elevated 25% month-on-month and 66% year-on-year in August.
Whereas annual progress for automakers has been excessive, as 2020 noticed the impression of a nationwide lockdown, in comparison with 2019 the numbers have been nonetheless encouraging. The 2-year nationwide quantity CAGR (compound annual progress charge) was 11% for Eicher Motors Ltd-VECV (Volvo JV Group), 10% for Tata Motors, 1% for Ashok Leyland Ltd and 22% for Mahindra and Mahindra , Emkay International Monetary Companies Ltd. “We count on demand to enhance by higher macros, a pickup in infra spending and a pickup in alternative demand,” Emkay analysts mentioned of their observe.
Tractor gross sales, which have grown strongly over the previous two years, nevertheless, slowed as monsoon rains exercise remained weaker than anticipated. M&M and Escorts Ltd tractor volumes have been down 13% and 22% year-on-year and 22% and 13% month-over-month, respectively.
The upcoming competition season, coupled with kharif plantings, that are nearly on the similar stage because the earlier yr, might enhance demand within the coming months, analysts at Motilal Oswal Monetary Companies Ltd. mentioned.
PV gross sales throughout the month have been affected by the chip scarcity regardless of sturdy demand. Trade volumes elevated to 250,000 items, implying a CAGR of 13% over two years, knowledge from Emkay advised. Nevertheless, sequentially, the volumes decreased by 15%. The 2-year nationwide quantity CAGR was 96% for Tata Motors, 9% for M&M and 6% for Maruti Suzuki. This scarcity is prone to pose challenges for PV quantity progress for many of 2021, analysts say.
Within the meantime, the expectation of the resumption of gross sales of two-wheelers continues. General volumes on this phase have been down 10% yr over yr, however elevated 2% month over month. Inventories stood at round 45 to 60 days and sellers count on good retail gross sales within the upcoming competition season, MOFSL analysts mentioned.
Rising commodity prices resulting in greater costs and rising gas prices add to the price of proudly owning two-wheelers and thus act as headwinds for home demand. Export demand remained sturdy, nevertheless, serving to producers like Bajaj Auto Ltd, TVS Motor Firm Ltd who rely closely on exports.
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