Strong auto sales in sluggish month

Strong auto sales in sluggish month

Auto makers reported strong sales performance in December despite it traditionally being a sluggish month. After witnessing slightly lower growth in November, volumes regained momentum owing to attractive year-end discounts and advance purchases in anticipation of price hikes in January.

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Overall, sales maintained a strong momentum in the month albeit at a slower pace, aided by healthy economic growth, positive consumer sentiment and easy financing.

Tata Motors Ltd reported a healthy 30.6% year-on-year (y-o-y) growth in total volumes in December in line with our estimates and led by the 27.9% y-o-y growth in domestic vehicle sales and 68.2% y-o-y growth in export sales.

Maruti Suzuki India Ltd registered a 17% y-o-y growth in volumes to 99,225 units led by the 26% y-o-y jump in domestic volumes to 89,469 units. Exports during the month fell 29.3% y-o-y to 9,756 units. Overall, volume growth during the month was restricted on account of the six-day plant shutdown for maintenance.

Mahindra and Mahindra Ltd reported a robust 38.3% y-o-y growth in total sales which came in marginally ahead of our estimates. Growth was aided by 41.9% and 31.3% y-o-y growth in the automotive and farm equipment segments, respectively.

Bajaj Auto Ltd reported a marginally lower-than-expected growth in sales at 9.8% y-o-y, with motorcycle sales moving up 10.8% y-o-y and three-wheeler sales posting 4.9% y-o-y growth. Hero Honda Motors Ltd registered a better-than-expected 33.3% y-o-y growth in sales volume, led by new launches. TVS Motor Co. Ltd reported 42.1% y-o-y growth in sales, which was in line with our estimates and led by the 93.8% y-o-y growth in scooter sales and 34.1% y-o-y growth in moped sales.

Edited excerpts from a report by Angel Securities. Your comments are welcome at

Graphics by Yogesh Kumar/ Mint