Auto sales in June likely to be mixed bag with growth seen in two-wheelers, Passenger Vehicles

Automobile wholesale volumes across segments is expected to be a mixed bag in June with expectations of growth in two-wheelers and passenger vehicles (PV). Commercial vehicles (CV) segment is likely to see a flat sales growth, while tractor sales are estimated to dip for the month.

According to Nuvama Institutional Equities, two-wheeler and tractor volumes would grow in high single digits vis-à-vis low-single digits for PV over FY24–FY26. Its top picks among OEMs are Bajaj Auto and Mahindra & Mahindra (M&M).

Here are June auto sales expectations across segments:

Two-wheelers

Two-wheelers industry volumes are likely to grow 5% YoY in the domestic market despite purchase deferrals due to extreme heat conditions and high base owing to strong marriage season demand last year, Nuvama Equities said. Wholesales are likely to be higher than retails on the back of inventory build-up with dealers.

Also Read: Tata Motors says demerger will allow all businesses to unlock potential

According to the brokerage estimates, TVS Motor Company sales may grow at 9% to 345,000 units, Bajaj Auto sales growth shall be flat at 340,000 units while it expects Hero MotoCorp and Eicher Motors Royal Enfield to post a fall of 3% and 9% to 425,000 and 70,000 units, respectively, in June.

Passenger Vehicles

PV industry volumes are expected to rise 3% YoY in the domestic market led by growth in Utility Vehicles and inventory build-up with dealers. M&M’s PV growth is likely to be robust at 26%, outstripping Maruti Suzuki India and Tata Motors.

Nuvama Equities anticipates total volume growth of 13% for M&M - Auto division to 70,500 units, 2% for Maruti Suzuki to 163,000 units and flat for Tata Motors - PV to 47,400 units.

Also Read: Auto Sector: Passenger Vehicle sales volume growth estimated to decelerate to 3-5% in FY25

Commercial Vehicles

CV industry volumes are likely to be flat YoY despite some slowdown in awarding of road construction projects. On the positive side, e-way bill generation has been higher than last year, indicating better freight availability for transporters, said the brokerage firm. It estimates total volume growth of 4% for Eicher Motors VECV, 3% for Ashok Leyland and 1% for Tata Motors. However, it expects M&M to report a decline of 1% in CV sales.

Also Read: How Hyundai India IPO may affect Maruti Suzuki, Tata Motors and M&M shares?

Tractors

Tractor industry’s volumes are expected to decline marginally by 1% YoY in the domestic market due to a high base and weak consumer sentiment in southern states. On the positive side, terms of trade have been benign in recent months as output inflation is higher than input inflation. The brokerage reckons total volumes shall decline by 1% for M&M Farm Equipment Segment and 4% for Escorts Kubota.

Read all Stock Market News Updates here

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.