Trucks, PVs were the best performers in February


Wholesaling of 2W and tractors down c.27-35% YoY; M&M and Tata are the top performers.

The Indian auto industry saw divergent volume trends across all segments in February. Truck wholesale grew an estimated ~15% yoy, PV remained flat but 2Ws and tractors fell c.27-35% yoy. MM and TTMT were characterized by growth, with wholesale up 27-32% year-on-year, AL also up 7% and MSIL flat; However, TVSL declined 5% while EIM(RE)/BJAUT/HMCL declined 15-29% yoy.

Compared to our estimates, volumes were better for MM/TVSL/AL, consistent with TTMT/MSIL/EIM, but lower for HMCL/BJAUT. Trucks Continue to Grow: Based on volumes reported by OEMs, we estimate wholesale for the truck industry grew ~15% yoy in February.

Registrations were also up 12% year over year, while e-way invoices rose 7% year over year in February, indicating continued improvement in freight and truck demand. Domestic CV volume was up 4% yoy at Ashok and 8% yoy at Tata, offset by some weakness in SCV/LCV (small/light commercial vehicle) volumes. but restrictions are gradually easing.

We estimate that February’s industrial wholesale trade will be flat in February (+4% qoq) versus a 17% decline in December-Q and a 3% decline in January. Lower production has also impacted retail, as February registrations are down 8% year-on-year. According to the dealer association, the channel’s inventory had dropped to 8-10 days at the end of January, from the normal 4-5 week level. M&M SUV volumes increased 39% mom (+79% yoy).

Tata had another good month with 47% YoY growth in domestic PV (down 2% MoM). Maruti’s domestic wholesale business rose 3% mom (-8% yoy), while Hyundai was flat (-15% yoy). year-on-year, suggesting that wholesale was also likely impacted by high channel inventories.

Domestic 2W wholesale fell 31-35% YoY for Hero, Honda and Bajaj; and declined 11-20% year-on-year for TVS and Royal Enfield. 2W exports grew about 2% yoy in February, with TVS growing 6% and Bajaj reporting flat volumes yoy. Dec -25%, Jan -33%).

Escorts said in its press release that the high base, steep price increases due to raw material cost inflation and high channel inventories led to weak wholesale sales. Both Mahindra and Escorts have been bullish on the tractor recovery for the past few months, although the slowdown has intensified.

Good Month for Mahindra and Tata: Mahindra and Tata were characterized by wholesale growth in February with volume up 27-32% YoY; Ashok also grew 7% while Maruti was flat. However, 2Ws remain under volume pressure as TVS are down 5% and Bajaj, Hero and Royal Enfield are down 15-29% year over year.


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