 "Urban demand to drive auto sales in FY16")
Automobile volumes have shown a pick-up in April, despite the stress in rural India. This has been led by a rise in urban demand and last year's low base.
A revival in economic and industrial activity is also driving commercial vehicle sales. How sustainable is this? Lower fuel and interest costs, return of the first-time car buyer and a general improvement in sentiment is driving urban demand, claim analysts, which should sustain through the financial year.
The category that continued to show sluggishness and volume decline is motorcycles, while scooters grew at a healthy pace in April. Scooter volumes for both Honda and TVS continued to grow in double digits, while motorcycle volumes contracted.
While the Society of Indian Automobile Manufacturers expects the two-wheeler segment to fare better in FY16 compared to passenger cars, the trend in April was different. Hero MotoCorp’s monthly volumes declined 6.6 per cent year-on-year (y-o-y), while Bajaj Auto declined 4.6 per cent. Volume growth of TVS were supported by scooter volumes.
In contrast, Maruti reported a robust 27 per cent y-o-y growth in domestic volumes. However, the firm’s retail sales grew 18 per cent. Inventories at dealerships increased to four weeks in April against three weeks in March. Analysts expect Maruti to report 12-14 per cent growth in volumes in FY16. Kotak Institutional Equities expects Maruti to increase market share this year.
Tata Motors reported a 57 per cent jump in passenger car sales, on the back of its new launches. Motilal Oswal Securities expects Tata Motors to report an overall volume growth of 28 per cent in FY16 and a 30 per cent in the medium and heavy commercial vehicle (MHCV) segment.
The uptrend in commercial vehicle sales continued in April. Tata Motors reported a 21 per cent y-o-y growth in MHCV volumes, while Ashok Leyland reported a 44 per cent jump. Light commercial vehicles (LCV) are showing a mixed trend. Tata Motors reported an overall 15 per cent decline in LCV sales, Ashok Leyland and Eicher Motors reported growth. Analysts are building in a strong growth for this category as well, as economic activity picks up in FY16.
A revival in economic and industrial activity is also driving commercial vehicle sales. How sustainable is this? Lower fuel and interest costs, return of the first-time car buyer and a general improvement in sentiment is driving urban demand, claim analysts, which should sustain through the financial year.
The category that continued to show sluggishness and volume decline is motorcycles, while scooters grew at a healthy pace in April. Scooter volumes for both Honda and TVS continued to grow in double digits, while motorcycle volumes contracted.
While the Society of Indian Automobile Manufacturers expects the two-wheeler segment to fare better in FY16 compared to passenger cars, the trend in April was different. Hero MotoCorp’s monthly volumes declined 6.6 per cent year-on-year (y-o-y), while Bajaj Auto declined 4.6 per cent. Volume growth of TVS were supported by scooter volumes.
In contrast, Maruti reported a robust 27 per cent y-o-y growth in domestic volumes. However, the firm’s retail sales grew 18 per cent. Inventories at dealerships increased to four weeks in April against three weeks in March. Analysts expect Maruti to report 12-14 per cent growth in volumes in FY16. Kotak Institutional Equities expects Maruti to increase market share this year.
Tata Motors reported a 57 per cent jump in passenger car sales, on the back of its new launches. Motilal Oswal Securities expects Tata Motors to report an overall volume growth of 28 per cent in FY16 and a 30 per cent in the medium and heavy commercial vehicle (MHCV) segment.
The uptrend in commercial vehicle sales continued in April. Tata Motors reported a 21 per cent y-o-y growth in MHCV volumes, while Ashok Leyland reported a 44 per cent jump. Light commercial vehicles (LCV) are showing a mixed trend. Tata Motors reported an overall 15 per cent decline in LCV sales, Ashok Leyland and Eicher Motors reported growth. Analysts are building in a strong growth for this category as well, as economic activity picks up in FY16.