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MOSL:AUTOMOBILES: Sep’22 wholesales suggest a good festive season

Automobiles: Sep’22 wholesales suggest a good festive season

2Ws/PVs/CVs were inline, while tractors were above est (ex. BJAUT and MM as numbers are yet to be released). PV wholesales have doubled YoY due to easing of chip shortages and strong demand. Domestic 2W wholesales inventory buildup for the upcoming festival season has started. CV demand has remained stable, with AL outperforming its peers.  Among 2Ws, TVSL was inline, HMCL was below est., while RE was above est. 2W/ PV/ CV/ 3Ws/ tractors sales volumes grew 7.5%/103%/18%/18%/39% YoY.

 

• 2Ws – Inline; grew 7.5% YoY: The upcoming festival season (Navratras and Diwali) is a crucial period for 2W retails. Festivals such as Ganapati and Onam had an encouraging start. Dealer inventory stands at 50-60 days as per our channel checks. In 2Ws, while HMCL registered a 2% YoY decline (to 520k units), TVSL grew 9% YoY to 379k units despite weak exports. RE grew 145% YoY/ 17% MoM to 82.1k units.
• PVs – Inline; grew 103% YoY: Retail demand continues to remain strong and easing chip shortages has led to a decline in waiting periods. Wholesales in Sep’22 doubled on a low base, which was affected due to chip shortages. In PVs, MSIL/TTMT PVs grew 104%/85% YoY to 176.3k/47.9k
• CVs – Inline; grew 18% YoY: M&HCV volumes were above est. and LCV volumes were below est. M&HCV/LCV volumes grew 32%/5% YoY. In CVs, wholesales for AL/TTMT/VECV grew 84%/5%/9% YoY.
• Tractors – Above est.; grew 39% YoY: While monsoons have been above long period average (LPA), but are still deficient in key states such as UP/Bihar/Jharkhand/WB. Only ESC reported its numbers, which were above our estimates at 12.2k units; grew 39% YoY

 

Key highlights of monthly volumes

• 2W exports continued to be stressed as reflected by TVS export wholesales that declined 12% YoY to 77.8k units.
• RE saw a strong 17% MoM improvement to 82k units (+145% YoY), driven by the first month of Hunter sales.
• AL continues to recover market share as reflected in substantial outperformance v/s peers (AL grew 84% YoY to 17.5k units v/s TTMT/VECV growth of 5%/9% YoY)
• ESC was a strong beat, driven by inventory build-up for the festive season and market share recovery, led by higher discounts.