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MOSL: AUTOMOBILES: 2W/PV sales slow down due to onset of Adhik Maas; Healthy infra demand and shift to low-tonnage vehicles drive CV volumes

Automobiles: 2W/PV sales slow down due to onset of Adhik Maas; Healthy infra demand and shift to low-tonnage vehicles drive CV volumes

 

Our interaction with leading channel partners indicates demand remained robust during the marriage season. However, retail momentum has lost steam in the northern, central and western markets due to the onset of 'Adhik Maas' (from 16th May to 12th June). Growth in southern markets, though, remains steady. 

• CVs: The impact from easing overloading restriction is ~5% of volumes in Uttar Pradesh (UP). This, however, is mitigated by healthy demand for tippers and customers shifting to low-tonnage vehicles. Discounts remain stable sequentially. Lag in the freight rate increase (relative to a rise in diesel cost) has also impacted retails in May.
• 2Ws: Wedding season demand remains robust, with average retails growing 15-18% for entry-level and executive bikes. However, the onset of 'Adhik Maas' from 16th May has slowed down retails in key markets.
• PVs: MSIL retails are growing at 11-13% in southern markets and 8-9% in other markets. Rural dependent M&M, too, is witnessing healthy retails in the eastern, western and central markets.
• Price hikes: (a) PV - MSIL and HMIL indicated a price hike of ~1.5-2% from June. (b) 2W - TVSL (~INR900 for Ntorq, other scooters by INR300 from May18), HMCL (INR200/unit in May on top of INR300/unit in April). (c) CV - TTMT (1.5% in select models).