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MOSL: AUTOMOBILES-Jan’19 Wholesales — a mixed bag-Ashok Leyland, M&M and Royal Enfield surprised positively

AUTOMOBILES: Jan’19 Wholesales — a mixed bag; Ashok Leyland, M&M and Royal Enfield surprised positively

 

Even as PV volumes remained weak for the seventh consecutive month in Jan’19, low channel inventory and new product launches are helping it to recover. On the other hand, CV wholesales were mixed in Jan’19 led by AL’s better-than-expected volumes, while TTMT volumes were broadly in line. Tractors volume growth slowed to 3% YoY (+28.2% MoM) led by high base and muted farm sentiment in key markets.

Key highlights from Jan’19 wholesale volumes (including exports):

• PVs – new products and low inventory drive volumes: PV volumes continued to remain weak for the seventh consecutive month, but it appears to be recovering from the negative sentiments influenced by higher fuel prices, higher financing and insurance cost, etc. The new product launches and low system inventory helped MSIL and MM (PV) wholesales, which grew 0.2% and 0.1% YoY, respectively.
• CVs – drag in volumes led by TTMT: CV wholesales were mixed in Jan’19, led by AL’s better-than-expected volumes, while TTMT volumes were broadly in line. M&HCV volume declined 7.4% YoY (+2.3% MoM), while LCV volumes grew 2.1% YoY (+15.9% MoM). However, YTD both segments grew 19-25% YoY. TTMT indicated that subdued market sentiments, high interest rates, lag effect of revised axle load norms’ implementation, slowing industrial output and declining IIP growth index were the primary factors for lower sales.