December drive: Smart rise in auto wholesale volumes

By: |
January 2, 2021 5:17 AM

“Our dealer checks indicate post a subdued festive period — October-November 2020 — for two-wheelers retails will likely decline y-o-y in December,” analysts at Nomura wrote recently.

However, registration data is expected to show a double-digit rise, reflecting sales during the festive season.However, registration data is expected to show a double-digit rise, reflecting sales during the festive season.

Wholesale despatches of automobiles bounced back smartly in December with automakers replenishing the stocks at dealers ahead of the price increases in January. A low base effect also helped boost the numbers. The smart 14% y-o-y rise in the CV despatches at Ashok Leyland was encouraging; the Street had not pencilled in such a strong performance.

Analysts observed that while retail sales were seen to be strong in the first half of the month, demand may have slowed in the last week or so.

“Our dealer checks indicate post a subdued festive period — October-November 2020 — for two-wheelers retails will likely decline y-o-y in December,” analysts at Nomura wrote recently.

They added that for passenger vehicles (PVs), retail sales would likely to fall y-o-y in December due to the smaller inventory and lower discounts.

However, registration data is expected to show a double-digit rise, reflecting sales during the festive season.
Hyundai Motor reported a near 25% y-o-y jump in wholesales while despatches at Maruti Suzuki increased at a good 18% y-o-y. SS Kim, MD and CEO, Hyundai Motor, said his company produced 71,178 vehicles in December, the highest in any month.

Toyota Kirloskar reported an increase of 14% y-o-y. Naveen Soni, senior V-P (sales & service), said bookings by customers had been strong in the past months, enabling the company to clock a 6% y-o-y increase in wholesales in Q4CY2020. Soni added retail sales have also been very encouraging.

With rural demand remaining strong, tractor sales at Mahindra & Mahindra (M&M) grew well, registering a sharp increase of 23% y-o-y. Hemant Sikka, president (farm equipment sector), M&M, said the restoration of channel inventory after the festive season as also the price hike announced by major OEMs helped drive the volumes.

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