Passenger vehicle sales steady, commercial vehicles drive growth in March

Passenger vehicle sales steady, commercial vehicles drive growth in March
Commercial vehicles drive Indian auto industry's growth in March 2023Canva
  • The Indian auto sector reported March sales in line with analyst expectations.
  • Commercial vehicle (CV) segment led the growth in March, while passenger vehicles (PVs) saw a moderation.
  • Two-wheeler sales saw an uptick, as expected. On an annual basis, Royal Enfield reported the highest sales in its history.
  • Auto stocks shone on Monday, with auto companies making up three of the top five gainers on the benchmark Nifty50 index.
The Indian auto industry’s March sales numbers were in line with analyst expectations. Commercial vehicles (CVs) led the growth, thanks to pre-buying ahead of the BS6 Phase 2 transition, while passenger vehicles (PV) witnessed a steady month.

This was evident in the volume growth of auto companies in the CV segment, which was in the range of 7% to 63% on a month-on-month basis. On a year-on-year basis, too, three out of the five major companies reported growth between 17% to 35%.

On the other hand, the PV segment witnessed a moderation in sales as expected, except for Mahindra & Mahindra that reported strong momentum on both year-on-year as well as month-on-month basis.

Commercial vehicles drive growth

The CV segment witnessed healthy growth thanks to customers buying vehicles ahead of planned price hikes by auto companies to comply with the new BS6 Phase 2 emissions norms that kick in from April 1.


“Medium and heavy commercial vehicle (MHCV) dispatches were above estimate led by strong demand from underlying industries and heavy pre-buying before BS6-II transition,” said a report by Motilal Oswal.

CV sales were also assisted by year-end buying to claim depreciation benefits. The infrastructure push also aided demand on expected lines.

“Fleet operators’ sentiment continues to improve based on pick up in infrastructure activities,” said a report by JM Financial.

CompanySales (March 2023)YoY changeMoM change
Tata Motors - CV46,8230%28%
M&M - CV27,97917%7%
Ashok Leyland23,92619%29%
Eicher Motors - VECV11,90635%63%

Source: Company reports

Analysts at JM Financial are optimistic about the CV segment’s outlook going forward, thanks to “improving fleet operator’s profitability on gradual freight hikes and rising fleet utilisation and rising bus orders from State Transportation Undertakings (STU).”

Passenger vehicle sales in line with expectations

M&M outperformed its peers in the passenger vehicle segment, thanks to a robust industry-wide demand for utility vehicles (UV). The company has a strong presence in this category thanks to cars like the XUV 700, Scorpio-N and Thar, among others.

“We are delighted to close the year with a growth of 50% for the auto sector on an annual basis and the highest-ever numbers, in almost all segments of the business. Our SUV business recorded all-time high numbers,” said Veejay Nakra, president of M&M’s automotive division.

CompanySales (March 2023)YoY changeMoM change
Maruti Suzuki1,70,0710%-1%
Tata Motors - PV44,2255%3%
M&M - PV35,99730%19%

Source: Company reports

Despite a slight moderation in demand during the month, analysts remain optimistic about the PV segment. “In case of PVs, volumes remain steady even as supply constraints continue to impact production,” said JM Financial in its report, adding that channel checks indicate a robust order book.

Two-wheeler sales see an uptick due to festival demand, BS6 Phase 2 transition

Two-wheeler sales witnessed an uptick on expected lines, thanks to festival demand and the BS6 Phase 2 transition. Market leader Hero MotoCorp reported a healthy double-digit growth in its volumes on both year-on-year as well as month-on-month basis, while its peer TVS Motor reported a slight increase on YoY basis.

CompanySales (March 2023)YoY changeMoM change
Hero MotoCorp5,19,34215%32%
TVS Motor3,17,1523%15%
Royal Enfield72,2357%1%

Source: Company reports

Eicher Motors’ Royal Enfield continued to grow at a healthy pace, recording its highest-ever sales in a financial year at 8.34 lakh units. The company plans to expand its 650cc range of motorcycles this year with Scram 650cc, Classic 650 and Himalayan 650. The 350cc category will see two new launches this year, with Bullet 350 and Electra 350.

However, the analysts at Motilal Oswal underlined that a “broad-based recovery is yet to happen” in the two-wheeler segment.

Auto stocks shine

Auto stocks were amongst the top gainers in mid-day trade on Monday – three out of the top five gainers on Nifty50 were from the auto sector. Amongst sectoral indices, the Nifty Auto index was the top gainer by a wide margin.

Here are the top five gainers on the Nifty Auto index:

CompanyCurrent market priceChange
Hero MotoCorp₹2,4213.12%
Maruti Suzuki₹8,5002.50%
Eicher Motors₹3,0082.01%
Bajaj Auto₹3,9581.89%
Sona BLW₹4201.51%

Source: NSE, as on April 3, 2023

$NIFTYAUTO.NSE has been mired into two simultaneous Broadening formations, where the smaller one seems to have completed with its recent lows. The White Hammer on Weekly timeframe puts credence to the hypothesis of the bottom formation. The odds are high that the Index can now surge to the upper end of the larger Expanding formation originating from Feb'21 Highs. A follow through of previous week's Hammer would be a confirmation from candlesticks' viewpoint. A break and close below 11600 can invalidate this scenario.

— (@piyushchaudhry) April 03, 2023


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