August auto sales are in focus. Vehicle sales are projected to be mixed in August 2024, according to analysts at domestic brokerage Nuvama. The two-wheeler (2W) and tractor categories are expected to rise, whilst passenger vehicles (PV) and commercial vehicles (CV) may drop.
In the 2W segment, experts expect mass-market original equipment manufacturers (OEMs) like as Honda, Hero Moto Corp, Bajaj Auto, and TVS to perform well. Eicher Motors-Royal Enfield is likely to perform flatly.
Forecasts for the PV sector vary. Analysts believe that Mahindra & Mahindra (M&M) would expand, while Maruti Suzuki may drop because to a large comparison base from the previous year, as the festive season (Onam) began earlier last year.
"Over FY24-26E, we expect 2W/tractor volumes to expand in the high single digits against the low single digits for PV and CV. "Our top OEM picks are M&M, Bajaj Auto, and Escorts," Nuvama stated in a note.
Meanwhile, on the stock exchange, M&M has declined 6% in the last month, while Escorts has plunged more than 7%. In contrast, Bajaj Auto has resisted the trend, rising by more than 10%, according to Bombay Stock Exchange (BSE) data.
Two-Wheeler (2W): According to analysts, industry volumes are expected to expand in the high single digits, or approximately 8% year on year in the domestic market. They believe that this development is being driven by robust rural demand as well as consistent urban demand.
Rural sales are projected to be strong due to increased sentiment following typical monsoon conditions. Furthermore, wholesale sales are expected to surpass retail sales due to dealer inventory buildup ahead of the holiday season.
As a result, Nuvama estimates total volume increase of 10% for TVS to 380,000 units, 7% for Bajaj Auto to 365,000 units, and 4% for Hero MotoCorp to 510,000 units. Eicher Motors-Royal Enfield, on the other hand, is expected to maintain its current production level of 77,500 units.
Commercial trucks: The commercial vehicle sector is expected to have a minor fall of roughly 4% year on year, owing to a large base for freight trucks. However, e-way bill generation has grown compared to the previous year, indicating improved freight availability
Thus, experts at Nuvama forecast a 7% increase in total volume for Eicher Motors-VECV to 6,900 units, a flat growth for Ashok Leyland to 15,600 units, and a 4% fall for Tata Motors CV to 30,650 units. Passenger Vehicles: Volumes are predicted to fall by about 3% year on year. Analysts say the modest result is due to the earlier commencement of the festival season (Onam) previous year.
As a result, Mahindra & Mahindra (M&M) is expected to record 13% growth in the PV market, outpacing Maruti Suzuki (MSIL) and Tata Motors (TTMT). We predict a 1% increase in total volume for M&M-Auto (including PV, CV, and 3W) to 71,000 units, a 6% decrease for Maruti Suzuki to 152,500 units, and a 2% increase for TTMT-PV to 44,850 units. Additionally, automobile discounts are bigger than previous year.
Tractors: According to Nuvama experts, tractor sector volumes are likely to expand moderately by roughly 4% year on year, boosted by improving farmer moods due to normal monsoon conditions.
Analysts believe that favorable trade conditions, with output inflation above input inflation, contribute to good growth. As a result, Nuvama expects total volume growth of 8% for Mahindra-Farm and 2% for Escorts, hitting 23,400 and 5,700 units, respectively.
