scorecardAll major automakers except Bajaj Auto expected to register growth in January say brokerages
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All major automakers except Bajaj Auto expected to register growth in January say brokerages

All major automakers except Bajaj Auto expected to register growth in January say brokerages
Business5 min read
  • Brokerages expect most India auto makers to record both year on year and sequential growth in sales in January.
  • The end of the ‘inauspicious period’ in the first half of January is expected to provide a boost to auto sales.
  • Weak macroeconomic conditions in international markets are dragging down Bajaj Auto since it is more reliant on exports than its peers.
All major Indian automakers, except Bajaj Auto, are expected to report a year-on-year increase in their sales volumes in January 2023.

An ‘inauspicious period’ that makes people stall vehicle purchases started in the second half of December 2022 extended through the first half of January. But analysts say that the demand picked up in the second half of the month, helping auto companies ring in the new year on a positive note.

“While the first half of January 2023 was dull due to the inauspicious period, which ended on January 15 (Kharmas/Sankranti), demand picked-up in the second half,” said a report by Motilal Oswal.

The low-base effect of the previous year is likely to reflect in the year-on-year growth number. But analysts expect most auto companies to report sequential growth, too.


YoY change

MoM change

Maruti Suzuki






Tata Motors



Hero MotoCorp



Bajaj Auto



Ashok Leyland



TVS Motor



Royal Enfield






Source: Brokerages / Change in sales volumes

The commercial vehicle segment, consisting of players like Ashok Leyland and VE Commercial Vehicles, a subsidiary of Eicher Motors, are expected to report a sequential decline this month due to the high base effect.

“CV segment is expected to register muted growth on a sequential basis due to high base effect, though the basic growth drivers are intact,” said a report by Sharekhan.

Bajaj Auto’s struggles continue to mount

The broad consensus amongst analysts remains that Bajaj Auto will be the only auto company to report a decline in its sales in January due to declining exports.

Exports accounted for nearly 52% of Bajaj Auto’s sales in January 2022. Fast forward one year, the share of exports in the company’s total sales is projected to fall to 40%.

In December 2022, exports accounted for 43% of its total sales.

“Bajaj Auto is expected to register a 14.7% y-o-y decline in volumes due to weak performance in the export segment. Management is indicating that export volumes would face headwinds in the near term and export volumes may reach normalcy by May-June 2023,” said the Sharekhan report.

Demand for premium cars and two-wheelers to remain strong, say analysts

Cars and two-wheelers in the premium segment are expected to remain strong in January, too, according to analysts.

While supplies of semiconductor chips are improving, analysts say supplies of automatic variants of passenger vehicles which utilise more advanced electronic components still remain weak.

“Despite high waiting periods for premium variants, we haven’t come across major cancellations across industry,” said a report by Yes Securities.

Eicher Motors’ subsidiary, Royal Enfield, is expected to report 25% YoY growth, with customers riding high on the Hunter, while newer products like the Super Meteor 650 are also seeing good enquiries from customers, according to the brokerage.

The brokerage also added that the waiting periods for the Hunter have increased from 1 month to 1-2 months now, indicating an increase in customer demand.

Entry-level car and two-wheeler sales still in the slow lane

On the other hand, entry-level cars and two-wheelers are still struggling, according to analysts. One of the reasons behind it is weak rural recovery, analysts say.

“Demand for SUVs continues to be better while the entry level segment is on weak footings as rural recovery is weak,” said Yes Securities.

The brokerage added that on the two-wheeler side, too, the sentiments remained mixed since rural recovery has not kicked in yet.

Overall, the consensus remains that weakness in rural areas is impacting sales of affordable cars and two-wheelers, while premium segment sales are to remain consistent.

$NIFTY50.NSE and $NIFTYAUTO.NSE are showing Inter market Divergence again.Last time Divergence occurred in June 2022 when Nifty gave reversal. Will the Divergence work again.Chances are High. We need to wait for follow up Buying though.

— (@TrendonomicsHD) January 30, 2023]]>


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