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MOSL: AUTOMOBILES | Aug’21: Supply chain constraints restrict PV wholesales; CV improving MoM; 2W yet to see recovery

AUTOMOBILES | Aug’21: Supply chain constraints restrict PV wholesales; CV improving MoM; 2W yet to see recovery; Tractor declines on high base

 

PV/CV wholesales were in-line, while 2W/3W/Tractor wholesales were below our estimates. Supply chain constraints are affecting PV wholesales, with some OEMs announcing a reduction in production for the upcoming months. In 2W, BJAUT and RE were in-line, whereas HMCL and TVS were below our estimates. PV/MHCV/LCV volumes grew ~8%/119%/35% YoY (in-line). 2W/3W/Tractor volumes declined 10%/18/15% YoY (below our expectation). 

• 2Ws - below our estimate; down 10% YoY (+2% MoM): Volumes declined 10% YoY (+2% MoM). Inventory stands at around 45-60 days, and dealers expect good retails during the upcoming festival season. Rising fuel costs and cost of ownership are acting as headwinds for domestic demand. Export demand remains strong (+36% YoY; +5% MoM). Volumes declined 22%/1%/8.5% YoY (flat/+4%/+4% MoM) for HMCL/TVS/RE and grew by 5% YoY (2% MoM) for BJAUT.
• PVs - in-line; up 8% YoY (-20% MoM): Sustained demand resulted in volume growth of 8% YoY (-20% MoM), but was restricted largely by the semiconductor shortage. With the decrease in production at major OEMs due to the semiconductor shortage, Sep'21 wholesales could see significant decline despite strong demand and new launches. MSIL volumes grew 5% YoY (-20% MoM). MM (UVs, including Pickups) volumes declined 8% YoY (32% MoM). TTMT PV volumes continued their strong show, with growth of 52% YoY (-7% MoM).
• CVs - in-line; up 18% MoM (61% YoY): M&HCV and LCV volumes were in-line. M&HCV/LCV volumes grew +119%/35% YoY (~26%/12% MoM). AL volumes grew 48% YoY (8% MoM). TTMT CV volumes grew 66.5% YoY (25% MoM). TTMT VECV volumes grew 93.5% YoY (12% MoM).