July 2022 auto sales preview: Upturn to persist in CVs, PVs and 2Ws; Tractors to be weak


Mumbai, July 28: Emkay Global Financial Services conducted a channel check to gauge the volumes’ estimate for the month of July. The channel checks indicate a positive momentum growth in sales for the commercial vehicles, passenger vehicles’ volumes should be higher, 2-wheelers’ sales likely to be better due to the ramp-up in production and upcoming festive season. However, Tractor volumes are likely to decline due to a high base and uneven spread of the monsoons. The brokerage firm has retained the positive view on the auto sector. Among OEMs pack, they are positive on M&M, Tata Motors, Maruti Suzuki, Ashok Leyland and Escorts.

Commercial vehicles should remain in an uptrend, with the robust growth in passenger and cargo segments. E-way bill trends indicate better freight availability compared with last year. Emkay expects a positive growth at 58% YoY for Ashok Leyland, 55% for Eicher Motor-Volve Eicher Commercial Vehicle, 42% for Tata Motors and 13% for M&M in the domestic market.

Passenger Vehicles should witness a robust growth on a large order book and production ramp-up. Among OEMs, the brokerage house estimates domestic volumes to grow by 49% YoY for Tata Motors, 28% for M&M and 8% for Maruti Suzuki. Vehicle discounts have increased MoM but remain significantly lower than the elevated levels seen in the past.

Two-Wheelers volumes are expected to improve due to higher production and inventory build-up with dealers. Emkay expects domestic volumes to improve by 35% for Eicher Motor-Royal Enfield, 6% for TVS Motor Ltd, 6% for Hero Moto Corp Ltd and 2% for Bajaj Auto.

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Tractor volumes are likely to decline due to a high base and uneven spread of the monsoons. Emkay expects a decline in domestic volumes – 13% for M&M and 16% for Escorts.