Auto sales: Strong double-digit growth in seen two-wheeler sales; PV sales to rise marginally

Automobile wholesales in July 2024 are expected to witness decent growth led by better retail and inventory build-up. Retail demand trends remained mixed during the month on the back of incessant rainfall witnessed in many parts of the country, which led to lower footfalls, and the lack of events or festivities, analysts said.

Two-wheeler wholesales are likely to have grown in strong double digits on a year-on-year (YoY) basis in July 2024, while commercial vehicles (CV) and tractors are expected to be broadly flattish. Passenger vehicles (PV) volumes are also estimated to have seen marginal growth.

“We expect good volumes across segments going ahead, with two-wheelers outrunning others. We have raised M&H CV growth to high single digits (earlier mid-single digits), led by robust bus demand (a 14% CAGR), continuing replacement demand, infra/economic activity and favourable bases,” brokerage firm Anand Rathi said in a report.

Two-wheeler Sales

Two-wheeler volume growth is estimated to be 20% YoY in July. Bajaj Auto’s two-wheeler volumes are likely to have risen 20%, Hero MotoCorp’s by 15% and TVS Motor Company’s by 12%, according to Anand Rathi. Meanwhile, Royal Enfield July sales are expected to have been flat.

Passenger Vehicle Sales

PV volumes are estimated to grow marginally by 3% YoY in July. M&M’s PV volumes are expected to have risen 19%, while Maruti Suzuki’s volumes may have been flat. Tata Motors’ July volumes are likely to have fallen 1%, Anand Rathi said. Blended discounts have increased, particularly for premium models.

Commercial Vehicle Sales

A small drop of 3% YoY is expected in CV volumes due to the weak LCV segment. VECV’s CV volumes are expected to have risen 15%; however, Ashok Leyland’s volumes are likely to have been flat. Tata Motors’ volumes are expected to be down 10% and M&M’s by 5%. Small growth in tractor volumes is expected with M&M’s tractor volumes likely to have risen 3% and that of Escorts Kubota by 1%, as per the brokerage estimates.

Anand Rathi remains positive on the auto sector and its preferred OEM stock picks are Ashok Leyland, Hero MotoCorp and Mahindra & Mahindra.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.