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Automobile Sector Performance

02 May 20236 mins read by Angel One
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Automobiles are one sector highly tracked by the investor fraternity. There are reasons behind the same, while the sales figures of commercial vehicles are considered as the primary indicator for revival of the economy. The motorcycles sales indicate how the rural scenario is? Further the four wheeler segment has a lot of interest with significant exposure of FIIs in the sector. It is true that there are factors like fuel cost that make an impact on the sales numbers as well. And with the rising fuel price there was expected to be some impact on the overall sales figures in the automobile segment. As the June 2021 month sales numbers are out let’s have a detailed look at the numbers.

While we are analysing the automobile sales numbers for the month of June 2021, there are few factors that we need to understand. Sales numbers for the Month May 2021 were comparatively lower and even June 2020 was a once in a century kind of scenario (on account of lockdown restrictions). Though the numbers are not comparable, here is the number crunching for the automobile sector for the month of June 2021.

We have segregated it in different segment viz – two wheelers, Passenger Vehicles (PV), Commercial Vehicles (CV) and tractors. Let’s start with the two wheeler segment (2W).

2W Jun-21 Jun-20 YoY (%) May-21 MoM (%) FY22YTD FY21YTD YTD (%)
Bajaj Auto 1,55,640 1,46,695 6.10 60,342 157.93 3,42,552 1,85,981 84.19
HMCL 4,38,514 4,30,889 1.77 1,59,561 174.83 9,40,689 5,39,737 74.29
TVS 1,45,640 1,45,264 0.26 52,215 178.92 3,42,443 1,86,463 83.65
Royal Enfield 35,815 36,510 -1.90 20,073 78.42 1,02,449 54,939 86.48

In the 2W segment, Bajaj Auto is the one that has managed to post best growth figures on YoY basis. It is followed by Hero MotoCorp with lower single digit growth of 1.77 percent on YoY basis. As an analytical practice the figures are also compared on a Month on Month basis. However with India facing a very disruptive second wave of Covid -19, majority of the states were under lockdown in May 2021. As a result the sales growth on the MoM basis does not depict the right picture. Usually the Year to date basis numbers showcase a rational picture. But here also the FY21 was marred by the nationwide lockdown. As regards the other numbers, while TVS Motors has remained almost flat on YoY basis and Royal Enfield witnessed negative growth.

As regards the company wise sales numbers following tables show detailed figures.

Hero MotoCorp Jun-21 Jun-20 YoY (%) May-21 MoM (%) FY22YTD FY21YTD YTD (%)
Motorcycles 4,41,536 4,18,141 5.6 1,78,076 147.9 9,58,941 5,24,179 82.9
Scooters 27,624 33,842 -18.4 4,338 536.8 64,918 40,486 60.3
Total 4,69,160 4,51,983 3.8 1,82,414 157.2 10,23,859 5,64,665 81.3
Domestic 4,38,514 4,30,889 1.8 1,59,561 174.8 9,40,689 5,39,737 74.3
Exports 30,646 21,094 45.3 23,483 30.5 83,800 24,928 236.2

In the case of Hero MotoCorp the motorcycles had single digit growth on YoY basis. The Scooters Segment witnessed a decline of 18 percent on YoY basis. However on the lower base the MoM figures were better placed. We feel in the last year despite the lock down affecting the urban Demand, the rural demand was intact in the 2W segment making a higher base in FY21 as well because of the pent up demand – April’20 had 0 sales and May’20 was 20-25% of normal run rate. It is the exports that helped the company show some growth on YoY and MoM basis.

Bajaj Auto Jun-21 Jun-20 YoY (%) May-21 MoM (%) FY22YTD FY21YTD YTD (%)
Domestic 1,55,640 1,46,695 6.1 60,342 157.9 3,42,552 1,85,981 84.2
Exports 1,54,938 1,08,427 42.9 1,80,212 -14.0 5,56,753 2,13,948 160.2
Total 2w 3,10,578 2,55,122 21.7 2,40,554 29.1 8,99,305 3,99,929 124.9
Domestic 6,196 4,494 37.9 488 1169.7 14,585 5,282 176.1
Exports 29,362 18,481 58.9 30,820 -4.7 92,124 37,892 143.1
Total 3W 35,558 22,975 54.8 31,308 13.6 1,06,709 43,174 147.2
Domestic 1,61,836 1,51,189 7.0 60,830 166.0 3,57,137 1,91,263 86.7
Exports 1,84,300 1,26,908 45.2 2,11,032 -12.7 6,48,877 2,51,840 157.7
Total Sales 3,46,136 2,78,097 24.5 2,71,862 27.3 10,06,014 4,43,103 127.0

In the case of Baja Auto also the base for FY21 was higher. But the FY22 numbers have also been very good. Bajaj has one of highest export contribution for all 2w cos and  the exports segment has helped the company post strong performance in the 2W as well as 3W segment. Again there is some difference in Bajaj Auto numbers as compared to peers on MoM basis as the company on MoM basis has witnessed decline in percentage terms on export front due to factors like supply chain disruption.

TVS Motors

In the case of TVS Motors it is the motorcycle segment that has provided good growth on the YoY and MoM basis. Even the 3W segment has provided strong performance on YoY and MoM basis. Mopeds and scooters witnessed decline on YoY basis.

TVS Motors Jun-21 Jun-20 YoY (%) May-21 MoM (%) FY22YTD FY21YTD YTD (%)
Motorcycle 1,46,874 84,401 74.0 1,25,188 17.3 4,05,289 1,19,307 239.7
Scooters 54,595 65,666 -16.9 19,627 178.2 1,39,435 81,786 70.5
Mopeds 36,623 41,009 -10.7 9,601 281.4 86,767 54,335 59.7
2w (Total) 2,38,092 1,91,076 24.6 1,54,416 54.2 6,31,491 2,55,428 147.2
3w 13,794 7,311 88.7 12,473 10.6 39,057 11,505 239.5
Sales volume (2w+3w) 2,51,886 1,98,387 27.0 1,66,889 50.9 6,70,548 2,66,933 151.2

Passenger Vehicle Data

The passenger vehicle (PV) sales numbers were better than the expectations. While the YoY figures were anyway ahead of street estimates on account of lower base, even the MoM figures have been very strong.

PV Jun-21 Jun-20 YoY (%) May-21 MoM (%) FY22YTD FY21YTD YTD (%)
Maruti Suzuki India 1,30,348 53,139 145.30 35,293 269.33 3,08,095 66,864 360.78
Hyundai 40,496 21,320 89.94 25,001 61.98 1,14,499 28,203 305.98
Renault 6,100 4,634 31.64 2,620 132.82 17,362 6,387 171.83
M&M (PV) 16,913 8,075 109.45 8,004 111.31 43,202 11,942 261.77
Toyota 8,801 3,866 127.65 707 1144.84 19,130 5,505 247.50

If we take a look at the growth numbers Maruti Suzuki India has posted the highest growth. And on the back of the same stock moved upwards

As regards the performance of Maruti Suzuki, Company’s mini segment grew by 67 percent YoY and 266 percent MoM to ~17.4k vehicles. Compact sales increased by 158 percent YoY and 238 percent MoM to 68.8k units. Mid-Size sales grew by 9 percent YoY and 73 percent MoM to 602 units. The waiting period for most of the models range from 2 to 6 months. Domestic sales increased by 141 percent YoY and 274 percent MoM to 126.2k units. As regards the demand, one can expect demand to recover on the back of pent up demand and preference for personal mobility as the Covid-19 lockdown fears still loom. Moreover high waiting period also helps with wholesale numbers. Following data clearly shows how the overall numbers have been for the company.

Maruti Suzuki (India) – Sales Figures June 2021

M&M

In case of M&M the Utility Vehicle (UV) sales increased by 109 percent YoY and 115 percent MoM. In case of commercial vehicles (CV) sales increased by 21 percent YoY and 75 percent MoM. Overall auto division domestic sales increased by 70 percent YoY and 89 percent MoM. With the opening of economy in phased manner the demand has started to come back from both Rural and Urban markets. As 2nd Covid wave curves continue to flatten the management expects strong recovery in coming months. The company’s supply chain is normalizing and the only problem remains is the global semi-conductor shortage. The New Thar has waiting period of ~10 months and current booking stands at around 55000 units.

As regards the other segments, the Tractor sales and CV sales the performance has been in-line with the street expectations.

As regards the other segments, the Tractor sales and CV sales the performance has been in-line with the street expectations.

CV Jun-21 Jun-20 YoY (%) May-21 MoM (%) FY22YTD FY21YTD YTD (%)
Ashok Leyland 6,448 2,394 169.34 3,199 101.56 17,987 3,814 371.60
VECV 2,438 1,358 79.53 1,223 99.35 5,806 2,129 172.71
Tractors Jun-21 Jun-20 YoY (%) May-21 MoM (%) FY22YTD FY21YTD YTD (%)
M&M 46,875 35,844 30.78 22,843 105.21 95,848 64,577 48.42
Escorts 11,956 10,623 12.55 6,158 94.15 24,500 17,690 38.50

Overall the performance of the automobile sales Figures have been in line With street estimates. However the numbers are not indicative of any particular trend and cannot be taken as a base to form a firm opinion. Along with the above numbers we are providing sales figures for other companies like Eicher Motors, Ashok Leyland and Escorts.

Eicher Motors Jun-21 Jun-20 YoY (%) May-21 MoM (%) FY22YTD FY21YTD YTD (%)
Domestic 35,815 36,510 -1.9 20,073 78.4 1,04,677 54,939 90.5
Export 7,233 1,555 365.1 7,221 0.2 18,963 2,330 713.9
Total RE 43,048 38,065 13.1 27,294 57.7 1,23,640 57,269 115.9
VECV 2,438 1,358 79.5 2,145 13.7 5,806 2,129 172.7
Ashok Leyland Jun-21 Jun-20 YoY (%) May-21 MoM (%) FY22YTD FY21YTD YTD (%)
M&HCV Goods 2,289 559 309.5 1,428 60.3 7,520 710 959.2
MH&CV Passenger 75 13 476.9 85 -11.8 340 13 2515.4
LCV 3,487 1,560 123.5 1,225 184.7 8,690 2,686 223.5
Domestic 5,851 2,132 174.4 2,738 113.7 16,550 3,409 385.5
Exports 597 262 127.9 461 29.5 1,437 405 254.8
Total Sales 6,448 2,394 169.3 3,199 101.6 17,987 3,814 371.6
Escorts Jun-21 Jun-20 YoY (%) May-21 MoM (%) FY22YTD FY21YTD YTD (%)
Domestic 11,956 10,623 12.5 6,158 94.2 24,500 17,690 38.5
Export 577 228 153.1 265 117.7 1,435 460 212.0
Total 12,533 10,851 15.5 6,423 95.1 25,935 18,150 42.9

 

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