Report
Jinesh Gandhi
EUR 120.00 For Business Accounts Only

MOSL: AUTOMOBILES-Diverging trends in Mar’19 wholesales; MSIL exceeds estimates, but RE volumes fall short

AUTOMOBILES: Diverging trends in Mar’19 wholesales; MSIL exceeds estimates, but RE volumes fall short

 

Mar’19 auto wholesales were a mixed bag. PV volumes remained weak (-0.7% YoY) for yet another month, although some names benefitted from new product launches. CV volumes declined 0.5% YoY, with growth in LCVs (+2.1% YoY) more than offset by a decline (-2.5% YoY) in M&HCV volumes. Tractor volume growth decelerated to 21.5% YoY (+20.5% MoM) off a high base; muted farm sentiment in key markets too acted as a major speed-breaker. 

Key highlights from Mar'19 wholesales data (including exports):

  • PVs - broad-based volume recovery still elusive: PV volumes remained weak for the ninth consecutive month in Mar'19. Notably, there are no signs of a broad-based recovery yet from the impact of higher fuel prices and an increase in financing/insurance cost, etc. While MSIL's dispatches declined 1.6% YoY, the new product launch in UVs led to 9% YoY growth in MM's (PV) wholesales. For FY19, PV sales were up 5.7%.
  • CVs - AL in line, TTMT exceeds estimate: CV wholesales were mixed in Mar'19 - AL's volumes were in line, while TTMT exceeded our estimate. M&HCV volumes declined 2.5% YoY, while LCV volumes increased 2% YoY. TTMT attributed the muted sales trend to subdued market sentiment, high interest rates, the lagged effect of the implementation of the revised axle load norms, the downtrend in the IIP growth index, and the high base. However, for FY19, both M&HCV/LCV segments grew in the range of 14-19%.
  • Tractors - ESC continues outperforming MM: Tractor volumes declined 21.5% YoY (+20.5% MoM), led by a high base and muted farm sentiment in key markets. ESC's volumes grew by 1% YoY (+64% MoM), continuing to outpace MM's tractor volume growth (-30.9% YoY; +3.7% MoM). For FY19, tractor sales grew 6.8%.
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Motilal Oswal
Motilal Oswal

​Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance. 

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Analysts
Jinesh Gandhi

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