From Maruti to Tata Motors, from Hero MotoCorp to TVS ⁠— here’s what June auto sales are likely to look like

• Models such as the top-end Maruti Baleno and Swift, Tata Altroz and Nexon, Mahindra Thar, and Bolero have waiting periods ranging from two to 10 months.
  
• Top exporters of motorbikes like Bajaj Auto and Royal Enfield-maker Eicher Motors are likely to clock solid growth, but Hero MotoCorp may see its sales decline.
  
• Commercial vehicles like trucks are closely linked to broader economic activity, and, hence, the recovery may be 50%-70% of normalised sales.
  

The shares of India’s largest car maker Maruti as well as its peer Tata Motors have seen over a 7% rally in the last one month because the car sales for the month of June are expected to look a lot better than they did the same time last year.

Company	Estimated car sales growth in India in June (YoY)	Share price change in last one month
Maruti	+125%	+7.18%
Tata Motors	+37.3%	+7.83%
M&M -- Utility vehicles	+31.9%	-2.35%
M&M -- Cars and vans	-57.3%	-

Source: ShareKhan, Google Finance

All three car makers had cut production since April 2021 when the second wave of COVID-19 infections had started to overwhelm the world’s sixth largest economy, and the fifth largest market for automobiles. While both production and actual sales have been slow for a while, the demand is starting to pile up.

“Models such as the top-end Maruti Baleno and Swift, Tata Altroz and Nexon, Mahindra Thar, and Bolero have waiting periods ranging from two to 10 months,” said a ShareKhan report dated June 28. That has led to expectations that price hikes may be in the offing.

The trend in two-wheelers is expected to be mixed. Top exporters of motorbikes like Bajaj Auto and Royal Enfield-maker Eicher Motors are likely to clock solid growth, but Hero MotoCorp may see its sales decline. The lack of exports, and continued focus on Indian customers, has been an issue for Hero for a while now.

Company	Estimated two-wheeler sales in June (YoY)	Share price change in last one month
Hero Moto	-7.9%	-2.18%
TVS Motor	31.9%	+0.84%
Eicher Motors	31.4%	+2.12%
Bajaj Auto -- India sales	-31.8%	-0.62%
Bajaj Auto -- Exports	70.6%	-

Source: ShareKhan, Google Finance

Both Bajaj Auto and TVS Motor export both two wheelers and three wheelers. TVS Motor, for instance, is expected to clock an 80% growth in three-wheeler sales at a time when the sale of auto rickshaws in India has been slow as schools and offices have only partially reopened. It’s the growth in exports that will drive revenue for both TVS and Bajaj, whose commercial vehicle (mostly three-wheelers) sales are estimated to grow 61%.


Commercial vehicles like trucks are closely linked to broader economic activity, and, hence, the trends are likely to be divergent based on the recovery in different parts of the country and the demand for each company in that region. “We expect a 50%-70% of normalised sales in the commercial vehicle segment,” the report said.

Company	Estimated commercial vehicle sales in June (YoY)
Tata Motors	+33.6%
Escorts (shares up over 3% in last one month)	-21.7%
Ashok Leyland -- light commercial vehicles (stock up 1% in last one month)	-8.5%
Ashok Leyland -- medium and heavy commercial vehicles	+231%
Eicher Motors	+9.7%

Source: ShareKhan

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