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MOSL: AUTOMOBILES-Sep’19 wholesales-Seasonal pick-up in PVs, 2Ws-Inventory correction leads to weak CV wholesales

AUTOMOBILES: Sep’19 wholesales: Seasonal pick-up in PVs, 2Ws; Inventory correction leads to weak CV wholesales

 

Sep’19 wholesales were a mixed bag, with signs of a seasonal recovery in 2Ws and PVs but sustained weakness in CVs. While PV volumes remained weak (-27% YoY, above estimate), CV volumes were down ~46% YoY (below estimate) led by a decline of 62% YoY in M&HCVs and 32% YoY in LCVs. 2W volumes declined ~21% (in-line). Initial feedback on demand during ongoing Navratras has been positive for both 2Ws and PVs.

 2Ws: In-line; up ~9% MoM led by inventory filling: 2W volumes declined ~21% YoY but were up 9% MoM as weak domestic sales were diluted by ~5% growth in exports. Domestic volumes declined ~35% for BJAUT and ~33% for TVS. HMCL's total volumes were down ~20% in the month.

• PVs: Above estimate; up ~15% MoM: PV volumes were weak for the 15th consecutive month. However, the MoM recovery and the positive feedback on inquiries boost the prospects of a sustained recovery in volumes. MM's (UVs incl. pick-ups) volumes fell ~25% YoY (+17% MoM), while MSIL's dispatches were down ~24% YoY (+15% MoM).
• CVs: Below estimate; down 46% YoY: CVs wholesales were below estimates. M&HCV volumes declined 60% YoY, while LCV volumes were down 30% YoY. TTMT's CV volumes declined (~45%; in-line), whereas both AL (-55%) and VECV (-43%) disappointed.