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MOSL: AUTOMOBILE | Mar-17 Sales Estimates-PVs to maintain strong momentum-Pre-buying to aid 2W/CV volume growth

​AUTOMOBILE | Mar-17 Sales Estimates: PVs to maintain strong momentum; Pre-buying to aid 2W/CV volume growth

We interacted with industry participants to get an update on the expected sales trend in March 2017 for our auto coverage universe. Volumes for 2Ws and CVs would benefit from the unexpected discounts being offered in these segments. Key highlights:

• ​Momentum in PVs is expected to continue, led by continued new launches, rural recovery post demonetization and festive buying (e.g. on occasions of Gudi Padwa and Navratras). Separately, pre-buying and the ban on BS-III vehicles (from 1 April) are likely to support CV/2W sales in March.
  
• Maruti Suzuki (MSIL) is expected to outperform the PV industry, while Ashok Leyland (AL) and TVS Motor (TVSL) should outperform the CV and 2W industries, respectively.
  
• We expect MSIL's volumes to increase ~11% YoY in March, outperforming the industry, primarily led by growth in compact UV space and supported by Baleno. Ignis is also likely to contribute to marginal incremental volumes. Tata Motors' (TTMT) PV segment is expected to be driven by Tiago and complimented by the newly launched Hexa and Tigor. Tiago enjoys a waiting period of 1 month (down from 2-3 months), while Hexa has a waiting period of 8 weeks.