Maruti Suzuki, Tata Motors, M&M in focus on strong sales momentum, price hikes
- Stock Market Today- Passenger Vehicles retails are expected to grow 6-8% YoY during the month of November largely driven by the festive season demand, as per analysts. The price hikes being taken by manufacturers from January are positive for margins and will be utilized for pushing December sales.
The festive season is likely to have propelled sales growth for passenger vehicle manufacturers as Maruti Suzuki India Ltd, Tata Motors Ltd and Mahindra & Mahindra ltd amongst others.
For Passenger Vehicles, retails are expected to grow 6-8% YoY during the month of November largely driven by the festive season demand, said analysts at Motilal Oswal Financial Services.
For Passenger Vehicles, festive period growth was largely underpinned by healthy SUV (sports utility Vehicles) demand and 25-30% higher discounts YoY for lower-end model, as per analysts at Motilal Oswal Financial Services.
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However, the volume growth remained flattish after the festive period due to sustained weakness in the entry-level portfolio added analysts.
Strong demand momentum is likely to continue for passenger vehicles feels Himanshu Singh. The price hikes announced by OEMs is also positive.
The passenger vehicle manufacturers generally see price hikes in the range of 1-2%, says Singh. These price hikes will be positive as price hikes undertaken by PV manufacturers have lagged those undertaken by two-wheeler manufacturers despite a rise in commodity prices.
Further the Passenger vehicle manufacturers will try to push inventory in December ahead of price hikes from January. Thus the December sales are likely to lighten up and Passenger Vehicle manufacturers will start giving some extra discounts. An expected price hike of 1-2% and discounts of 1-2 % by OEMs would mean substantial savings by customers say analysts.
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While sales momentum may remain strong , however Passenger Vehicles also see a higher base of previous year and hence overall growth may not seem substantial says Singh. The sale growth post Covid have remained strong leading to high base.
Amidst strong demand the Waiting periods for key SUVs also continue to reduce, said analysts. For example, waiting periods of M&M’s XUV 700 and Scorpio N reduced by 3-5 weeks and that for Maruti Suzuki India Ltd’s Ertiga, Jimny and New Brezza fell by 2-4 weeks as per Motial Oswal Financial Services. For Tata Motors Nexon it reduced by 2-4 weeks. The new Nexon currently has a waiting period of one month. Inventory levels for Tata Motors and M&M stood at 3-4 weeks, while Maruti has a slightly higher inventory of 4-5 weeks due to higher stock of lower-end vehicles.
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