The auto sales numbers over the nine months of FY2023 does indicate some improving trend but the divergence between the segments continue. While two-wheelers sales are in the red, with the shift to phase-II of BS VI norms slated for April 1, PV and CV manufacturers have started clearing their inventory, leading to comparatively higher retail sales than wholesales.
As a result of this some PV dispatches were hit and supply side headwinds also affected the production schedule of some. That said, the CV demand continues to remain strong and performed better than the general seasonal trend, led by robust end-market demand and a sharp increase in freight rates.
Arun Agarwal, VP – Fundamental Research of Kotak Securities reiterated that, “ Healthy order book is expected to support passenger vehicle segment growth in the near-term. Two-wheeler industry performance was weak likely due to channel inventory correction and muted demand in the domestic markets and continued challenges in export geographies.”
Within the CV segment, MHCVs outperformed LCVs and Ashok Leyland gained the highest volume market share. According to BNP Paribas’ IT & Auto analyst, Kumar Rakesh, “CV OEMs see good replacement demand for MHCVs in Q4FY2023. Consumer inflation moderated during the month and our proprietary commodity index suggests costs remained flat month on month.”
Going forward BNP Paribas, is cautiously optimistic about the two-wheeler segment too as “Growth in rural wages continued to be high and vehicle loan growth was still buoyant.”
The EV market is another key monitorable for most industry observers. The BNP Paribas report highlights that the Phase 1 of battery standards is likely hurt some key players. Ola, TVS and Bajaj Auto however have gained volume market share in the electric space and Kerala stands out with respect to December sales as there is a strong month-on-month volume growth.