PV industry volumes grew 13% YoY on a relatively low base. Analysts at IIFL Capital Services expect it to get adverse starting June. 2W industry volumes grew 15% YoY. Tractors declined about 10% YoY in April, as early festive season led to advancement of sales into March. MHCV declined 7% YoY due to reversal of pre-buy impact in March 2023 (related to BS-VI Phase 2).
Analysts at IIFL Capital Services expect YoY growth to restart in May. LCV industry declined 8% YoY, which is a continuation of weak trend in recent months. Based on these numbers, analysts at IIFL Capital Services believe that the risk to FY24 volume projections is to the downside. They had recently cut their volume growth assumptions across segments.
MHCV slips due to reversal of March pre-buy impact; LCV stays weak
MHCV sales declined 7% YoY in April 2023. MHCV SAAR, which had shot up to more than 400k in March 2023, fell to 340k in April. This was due to reversal of pre-buy impact in March 2023 (related to BS-VI Phase 2). On a CY2023 YTD basis, MHCV sales are up 18% YoY. Ashok continued to gain market share in MHCV, reporting a 5% YoY growth while industry declined. LCV industry declined 8% YoY; analysts at IIFL Capital Services see this as a continuation of recent weak trend. On a CY2023 YTD basis, LCV industry is flattish YoY.
PV sales up 13% YoY
Analysts at IIFL Capital Services estimate PV industry to be up 13% YoY in April 2023. The base was favorable at +2% in April 2022; this will turn adverse from June onwards. Maruti’s April 2023 market-share stood at ~41%, which is similar to its FY23 full-year market-share. Tata’s market share stood at ~14% in April 2023, similar to FY23. M&M’s UV volumes stayed high at 35k, above monthly average of 30k in FY23.
Tractors decline 10% YoY as base catches up
Volumes declined 10% YoY in April 2023. In 2023, festive season fell in March versus April in 2022. This led to advancement of sales into March 2023 (industry +14% YoY), which reversed in April 2023. Analysts at IIFL Capital Services are currently forecasting 5% growth for tractor industry in FY24. If monsoon is impacted due to El Nino effect, there would be downside risk to their estimate.
Domestic 2Ws up 15% YoY; 2W exports stay weak
2W industry volumes grew ~15% YoY and 4% MoM in April 2023. In March 2023, industry wholesales were hurt by low dispatches by Honda (possibly due to BS-VI Phase 2 transition). This normalized in April 2023, with Honda’s domestic dispatches up 71% MoM. Coming to 2W exports, analysts at IIFL Capital Services continue to see a sharp YoY decline in volumes. On a sequential basis, volumes have stabilized and seem to have bottomed out.
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