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MOSL: AUTOMOBILES | May 2017 volumes-1. Bajaj Auto; 2. Tata Motors

​AUTOMOBILES | May 2017 volumes: 1. Bajaj Auto; 2. Tata Motors

1. Bajaj Auto: Below estimate at ~314k (est. 340k); -9.8% YoY; Domestic volume decline 15% YoY; exports down 3% YoY

• ​BJAUT's May 2017 sales were 313,756 units (lower than est. of ~340,000), -9.8% YoY. Domestic volume declined 14.8% YoY (-2.2% MoM) while exports declined 2.6% YoY. Overall FY18 volume est. at 4.02m asking for a residual monthly run rate of 337.9k units.
  
• Domestic volumes declined 14.8% YoY to 174k units (v/s est. of 190k units). Motorcycle volumes declined by ~9.8% YoY as domestic motorcycle sales declined 13% YoY to 156.5k as growth continues to be under pressure. Motorcycle exports declined by 5.4% YoY.
  
• Dominar volume for May-17 came in at ~2.7k units, led by a good response for the product including exports of ~1.2k units. Management is very positive on the brand going forward. As per management on Dominar, "sure to achieve the target of about 9,000-10,000 sales of Dominar. Whether it will happen by September or December that is a question of time. The feel that we have from the buyers of Dominars is fantastic but we may have to give it some more time than what we expected."
  

Tata Motors: Above est at 38.3k units (v/s est 34.4k), decline of 4% YoY; PVs grew 24% YoY led by new launches; CVs decline by 12% YoY

• ​Tata Motors May-17 sales volumes declined by 4% YoY (+24% MoM) to 38,361 units (v/s est 34,406 units) led by lower than expected decline in CV volumes post pre buying.
  
• While PV segment with 24% YoY growth in volumes restricted further decline in overall sales. Cars volume grew 24% YoY led by continued strong demand of Tiago, Tigor and Hexa.
  
• The MHCV segment demand for Tata Motors was lower on the back of severe global supply constraints of Fuel Injection Pumps for BS4 engines along with lackluster demand post pre-buying after ban on BS 3 vehicles during March 2017. Management said "The market continues to remain weak and the demand has still not picked up. There are early signs of retails of BS4 vehicles but it has still been slow. The sale in M&HCV was affected primarily due to severe global supply constraints of Fuel Injection Pumps for BS4 engines. These issues are expected to be resolved on short notice with full capacity available as of July 2017. On the SCV and Pick-up segments, there is a strong sales recovery with full availability of BS4 products and good market response to new variants like Xenon Yodha and Ace Mega."