October 2022 auto sales: PV and CV segments continue to impress

2 Nov 2022 , 11:43 AM

MHCV, LCV on track to meet/beat FY23 estimates        

In October 2022, MHCV industry grew about 24% YoY. MHCV SAAR stood at ~350k in the month, higher than IIFL Capital Services’ FY23 volume forecast of 325k. Ashok Leyland, which lost share in April-December 2021 (25% MHCV market-share) is consistently clocking ~30% share this year. LCV industry grew 14% YoY. Current LCV SAAR of 600k is in line with IIFL Capital Services’ current forecast (600k, +25% YoY).

PV — IIFL Capital Services recently upgraded growth estimate from 25% to 28%

Analysts at IIFL Capital Services estimate PV industry volumes to be up 30% YoY in October 2022. The 5% MoM fall in volumes is due to lower production days in October 2022 (festive holidays). They estimate Maruti’s October 2022 market-share at about 41.5%, which is lower than its FY22 full-year market share of 43.5%. Tata’s market share stood at ~13.5% versus 12% in FY22. M&M is holding on to UV volumes of 30k+ versus average monthly volume of ~19k in FY22.

Tractors up 6% YoY as festive retails saw some growth

Analysts at IIFL Capital Services estimate tractor industry volumes to be up 6% YoY in October 2022. After declining YoY in the last few months, underlying retails seem to have clocked YoY growth in the festive season.

2Ws wholesales stay soft despite growth in festive retails

Analysts at IIFL Capital Services estimate 2W wholesales to have grown ~2% YoY in October 2022. This is relatively soft in the context of an easy base (25% decline in October 2021). 2W OEMs indicated growth in retails volumes in the festive season. However, weakness in retails in the preceding months and need for inventory correction meant that wholesale growth was muted. Volumes are weaker for Hero than for the rest of the industry. This is explained by weakness in some of the rural markets and hence, in motorcycles more than scooters (see our recent report). Starting November 2022, 2W industry will have the benefit of low YoY comparison. Hence, the industry may start reporting strong YoY trends from hereon.

Auto OEMs — Volume Summary

OEMs	Oct 21	Sep 22	Oct 22	% YoY	% MoM	FY23E growth	Implied rate for the rest of FY23
Maruti Suzuki	138	176	168	21%	(5)%	21%	171
Hero Motocorp	548	520	455	(17)%	(13)%	10%	434
Bajaj Auto	440	395	395	(10)%	0%	(4)%	328
M&M- Autos	42	64	61	46%	(5)%	42%	53
M&M- Tractors	47	49	52	11%	7%	6%	22
Ashok Leyland	11	18	15	34%	(15)%	34%	14
Tata Motors	68	83	78	15%	(5)%	32%	82
Eicher Motors- 2 wheelers	44	82	82	86%	0%	30%	61
TVS Motor	355	379	360	1%	(5)%	13%	291
Escorts	14	12	14	7%	18%	4%	7

Source: Company, IIFL Research; Note: All absolute volumes are in 000s
E: Estimated

Domestic auto industry volume trend and FY23 growth expectations

Segment	Apr 22	May 22	Jun 22	Jul 22	Aug 22	Sep 22	Oct 22E	FY22 growth	FY23E growth
PVs	293	294	323	341	328	357	339	13%	28%
2 Wheelers	1,149	1,239	1,296	1,366	1,537	1,712	1,565	(11%)	15%
MHCVs	24	25	27	25	24	31	27	50%	35%
LCVs	44	52	53	51	50	52	50	17%	25%
Tractors	89	82	94	55	53	114	123	(6%)	5%

Source: Company, IIFL Research; Note: Absolute volumes are in 000s
E: Estimated