MOSL: AUTOMOBILES | Dec-17 Sales Estimates-Strong wholesales on low base of previous year-Rural sentiment remains positive

​AUTOMOBILES | Dec-17 Sales Estimates: Strong wholesales on low base of previous year; Rural sentiment remains positive; 2W retails mixed bag, PV strong

Our channel checks indicate mixed 2W demand, with the momentum gained from the wedding season in the northern belt being partially negated by muted sales in Rajasthan, Gujarat and Maharashtra due to an inauspicious buying period.

PV retails are picking up, driven by year-end related discounts and the rush to beat price increases from January. On the CV front, players are offering steep discounts (~5% higher) and other incentives to clear the current stock ahead of the upcoming regulatory change that makes it mandatory for all new CVs to have air blowers (for better ventilation in the cabin) as a standard fitment from 1st January 2018.

The impact of low base of previous year (owing to demonetization) would lead to most OEMs reporting healthy double-digit growth in wholesales in Dec-17.

Key highlights:

• In the 2W segment, BJAUT’s dispatches are expected increase 37% YoY to 309k units, led by 33.6% growth in domestic sales and 40.8% growth in exports.
  
• HMCL is expected to report 67.5% YoY growth (-8.6% MoM) in wholesales to 553k units.
  
• TVSL is expected to witness 31.3% sales growth, as motorcycle, scooter and 3W sales are expected to grow by 54.7%, 36.8% and 44.6%, respectively. Moped sales are also expected to increase by 4.9% YoY. Exports are likely to improve by 49.9% YoY to 46k units.