Smooth ride for M&M in June but Bajaj and Hero Motocorp stutter

• Toyota saw its sales surge by 19% while Kia India saw its sales volumes fall by 19% in June.
  
• Maruti’s small and company car sales saw a massive slump even as SUV sales grew 2X.
  
• Two wheeler companies saw slow sales due to slump in exports.
  

Indian auto stocks are trading in the red on early Monday, as auto sales data released during the weekend failed to enthuse the markets. At the time of publishing this copy, the Nifty Auto index is trading flat while the benchmarks – Nifty50 and BSE Sensex – are half a percent in the green.

India’s largest automaker Maruti Suzuki has delivered an 8% increase in sales for the month of June, as compared to last year, thanks to the improved performance of its SUV range like Brezza, Grand Vitara and Ertiga – which surged two-fold.

Even as sales of its mini cars – Alto and S-Presso fell marginally, compact car sales like Swift, Celerio, and Baleno slumped by 17%. However, its overall sales are lower than Jefferies’ expectations of 1.68 lakh units in June.

As per Anand Rathi, the company management expects 5-7% industry volume growth in FY24, and Maruti Suzuki volume growth in double digits. The stock fell around 0.8% in early trade.

Tata Motors posted a flat sales of 1% growth in domestic sales in June. Jefferies predicted that Tata Motors will see a 4-5% YoY decline mainly led by lower LCV volumes.

Commercial vehicle sales fell by 15%, even as passenger sales went up by 8%. However, Girish Wagh, executive director of Tata Motors says that they showed a month-on-month improvement.

“For the month of June 2023, they were 20.2% higher than the vehicle sales registered in May 2023. Looking ahead, the promising monsoon and continuing infrastructure thrust by the government augers well for the CV industry, even as it faces the headwinds of high interest rates, fuel prices and inflation,” said Wagh. The stock too has been trading flat as it fell by 0.2% in early Monday trade.

Mahindra & Mahindra’s stock was trading higher by 1.6% as it presented a strong 21% growth in overall auto sales. The BSE auto index is trading down by 0.6% as of 11:44 am, with most stocks in the red.

2W sales suffer on tepid exports

Bajaj Auto sales fell by 2% overall, but the fall is lower than expected as Jefferies predicted it to fall to 3.3 lakh on account of lower exports. However, the automaker withstood it to 3.40 lakh. In spite of it, the stock fell by 1.1%.

TVS Motors’ sales grew 4% but the growth was lower than analyst expectations – leading to a 0.7% fall in the stock.

Hero Motocorp stock also fell by over 1.7% after it reported a 9.8% fall in sales. The company however hopes sales will pick up in the coming months. “The onset of monsoon in most parts of the country and overall economic indicators bode well for a growth in demand, and industry volumes are expected to pick up leading into the upcoming festive season,” the company said in a press release.

Source: PTI & other reports
*Domestic sales taken into account for Tata Motors

International players present a mixed bag

The best surprise however came from Toyota whose volumes grew by a strong 19%.

"Ever since the launch of Urban Cruiser Hyryder and Innova Hycross, we are witnessing continued high acceptance by our customers," said Atul Sood, VP- sales and strategic marketing of Toyota Kirloskar Motors.

Kia India saw its volumes fall by 19%, but the company hopes that the launch of its new Seltos will give back its leadership position in the mid-SUV section. Honda sales however continue to slip as they slumped by a massive 35%.

(With inputs from PTI)