MOSL: AUTOMOBILE-Healthy festive retails drive 2W and PV sales-Demand buoyancy led by positive rural sentiment

​AUTOMOBILE: Healthy festive retails drive 2W and PV sales; Demand buoyancy led by positive rural sentiment, festive discounts

We interacted with leading auto channel partners across key markets like Andhra Pradesh, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh and Tamil Nadu. Our key takeaways:

• 2Ws are witnessing healthy retail growth of 10-15% YoY, led by festive demand (Navratri in key markets like Maharashtra, Gujarat and Rajasthan). Growth is visible in rural markets also, as higher crop realizations are leading to improvement in farmers’ cash position. Crop realization in the agri-driven Nashik market is up 3x for the current season. TVSL, HMSI and HMCL continue to see better retails than BJAUT.
  
• On the PV front, MSIL is seeing healthy growth of 15%+ in retails. MM is also witnessing 8-10% volume growth, as the healthy spread of rains in rural areas has driven an improvement in sentiment.
  
• CV demand is also improving month over month. However, full demand recovery is still sometime away due to muted freight volumes and lower rentals. There are no signs of discount moderation in the M&HCV segment. iEGR is gaining momentum, with increasing acceptance.
  
• TVSL took price increase of INR275-290 per motorcycle and INR100 per moped effective from September. HMSI is also indicating price increase of INR400-500 per unit from October. Other OEMs have not indicated price hikes so far.
  
• In the 2W segment, HMCL is partially recovering lost market share with refurbished Duet in key markets like Rajasthan, though discounts/benefits on the HMCL scooter models are as high as ~INR3k (v/s competition offering free insurance scheme worth ~INR1.5k).