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MOSL: AUTOMOBILES | Sep’21: Wholesales impacted by chip shortage; PVs most affected; 2W/Tractors witness an inventory push ahead of festivities

AUTOMOBILES | Sep’21: Wholesales impacted by chip shortage; PVs most affected; 2W/Tractors witness an inventory push ahead of festivities

 

2W/CV wholesales were above our estimate, whereas PV/3W wholesales disappointed and Tractors were in line. Sep’21 saw the worst supply chain challenges, which affected wholesales for PVs and premium 2Ws, though the situation is expected to gradually improve from Oct’21. Among 2Ws, HMCL was in line, whereas BJAUT/TVSL/RE were above our estimates. 2W/PV/Tractor volumes declined by ~16%/38%/11% YoY, whereas CV/3W volumes grew by 35%/14% YoY on a low base.

 

• 2Ws above our estimate, declined by 16% YoY (+13% MoM): Wholesales were driven by inventory filling for the upcoming festive season as OEMs are cautiously optimistic. Inventory stands at 45-60 days. Volumes fell 11%/26%/44% YoY (+7%/+17%/27% MoM) for BJAUTO/HMCL/RE and grew by 6% YoY (21% MoM) for TVSL. RE is the worst affected among the 2W pack due to ongoing supply chain constraints.
• PVs below our estimate, declined by 38% YoY (27% MoM): Despite strong demand for PVs and a high waiting period, OEMs could not supply enough due to the ongoing semiconductor shortage. The situation in Oct'21 is expected to improve with the opening of chip manufacturing factories. MSIL's volumes declined by 46% YoY (34% MoM). MM (UVs including Pickups) volumes declined by 30% YoY (11% MoM). TTMT's PV volumes continued its strong showing, with a growth of 22% YoY (-8% MoM).
• CVs above our estimate, grew by 12% MoM (35% YoY): M&HCV and LCV volumes were above our estimate. M&HCV/LCV volumes grew by 24%/4% MoM (~76%/12% YoY). Volumes for AL grew by 14% YoY (2% MoM). TTMT's CV volumes grew by 28% YoY (2% MoM). The same for VECV grew by 73% YoY (27% MoM).