Thu. Sep 16th, 2021


  • Hindi news
  • Tech auto
  • Automobiles: Retail, Inquiries and Bookings Reflect Sustained Optimism; PV And Tractor Wholesales Remain Low Due To Supply Constraints

Fed up with Ads? Install Dainik Bhaskar app for news without ads

new Delhi27 minutes ago

  • Copy link

Consumer sentiment has improved, but the market is cautious over fears of a second Kovid-19 wave

  • Festive season and inventory refilling are expected to increase wholesale in December 2020
  • Wholesale volumes are expected to grow 38.4% year-on-year due to strong demand for tractors

Motilal Oswal Institutional Equities has released a report related to the automobile sector. Accordingly, vehicle demand is better in December 2020 as compared to the previous year. Inventory for passenger vehicles and tractors is lower than normal. Festive season and inventory refilling (for PVS and tractors) are expected to increase wholesale in December 2020, meeting the demand for spillovers.

Conversations with the industry’s leading channel partners reflect optimism. The two-wheeler inventory currently stands at 30–45 days, with PV inventory entering the last week of December at the lowest level (10–20 days) in fast-selling models with a waiting period of 4-6 weeks.

Tractors demand strong
Medium and Heavy Commercial Vehicles (M & HCVs) are looking at government spending to revive infrastructure demand for the infrastructure / construction segment. While haulage inquiries are better than last year. Demand for tractors remains strong. The increase in retail and supply only meets demand. Overall consumer sentiment has improved, but the market is cautious over fears of a second Kovid-19 wave.

In December 2020, wholesalers are expected to grow year-over-year for all segments except M & HCV and 3W. Wholesale volumes are projected to grow 14.4% in December 2020 for two-wheelers and 5.4% for private vehicles. At the same time, commercial vehicle volume is estimated to fall by 2.8%. Its bulk volume is expected to increase 38.4% year-on-year due to strong demand for tractors.

Two-wheeler segment

  • Retail sales in this segment remained largely flat on a year-on-year basis. However, there was inventory stocking at the sub-dealer level, which was cited as the reason for the price increase from 21 January.
  • This year, many entry level models such as Hero Deluxe get discounts up to Rs 1500, Bajaj Platina up to Rs 1600, Pulsar 125 up to Rs 2000.
  • Dealers are holding an inventory of 1 to 1.5 months. Royal Enfield has a waiting period of 4-6 weeks for its bike, which is the same for Meture in 14-18 weeks.
  • According to Motilal, wholesale will increase by 23% for Royal Enfield, 15% for HMCL, 7.8% for Bajaj Auto (5% increase in domestic 2W) and 17.4% for TVSL.

Private vehicle segment

  • There is a strong demand for retail sales in the private vehicle segment. Manufacturers have restricted the year-end rebate on the lower side compared to the 50% rebate of the previous year.
  • The period of waiting period is high in the original equipment manufacturers (OEMs) of the PV segment. MSIL is seeing a loss in sales, as it is getting a waiting period of 3-12 weeks from the OEM. At the same time, due to rising petrol prices, people are taking interest in the CNG model.
  • Volume for MSIL is expected to increase by 3.4%. At the same time, a slight increase of 2.5% is expected in utility vehicles (including pick-up) due to supply chain bottlenecks.

Commercial vehicle segment

  • Demand for M & HCVs in the infrastructure segment remains strong, as the government has resumed spending on projects.
  • Its inquiries are better than last year, but transporters are holding the purchase in hopes of higher discounts. The discount is down to 6-7% due to higher demand in the high tonnage segment.
  • TTMT and Bharat Benz were better than their competitor in the high tonnage portfolio. LTV is stable at 80–85%, although discounts have increased from 13–15% to 15–17%.

Infrastructure segment

  • Demand for Light Commercial Vehicle (LCV) and Small Commercial Vehicle (SCV) was the same as last year, as the price increase in December was 20% and the discount in the year end was low. In such a situation, the customers postponed the purchase till January 2021.
  • The introduction of Ashok Leyland’s Bada Dost in the rest of India will boost its LCV sales. We expect AL’s wholesale to grow at 8.5% year-over-year and 6.8% for TTMT.

Tractors segment

  • Demand for tractors remains high due to good crop and preference for agricultural mechanization. Demand for both Mahindra & Mahindra and Escort tractors remains. Sales of high HP tractors are increasing due to high demand from the agriculture segment.
  • Commercial use of tractors is also increasing gradually. Dealers are also holding inventory (10-30 days) depending on the model. It is expected that tractor volumes for MM / ESC may increase by 30% / 75% year-on-year due to high demand and low base.

.



Source link

By NEWS TIME

NEWS TIME