Auto sales in April continued to witness growth, especially in the two-wheelers and commercial vehicle segments. However, passenger vehicle sales remained muted during the month, even as key players announced new launches for the fiscal.
Here is a segment-wise breakdown for the month:
Passenger Vehicle Segment Lags
Maruti Suzuki India Ltd. reported 5% growth as compared with last year, much below the 9–10% growth estimates by analysts. The positive catalyst was the launch of the new Swift, which is key in the compact segment.
The passenger vehicle segment has been a rank underperformer in the previous fiscal, and a new launch will aid volume. Analysts estimate the company may have done some de-stocking on the back of this launch, which may have led to lower growth.
Tata Motors Ltd. reported a flat 2% growth, lower than the 5% forecasted by analysts. While the company had a strong fiscal in the previous year, the entry of the new Mahindra 3XO into the sub-Rs 10 lakh SUV segment will have a significant impact on volume going forward.
Currently, Nexon and Punch have a 14% market share each in the compact SUV segment, and this launch by its rival will be key to checking if the segment expands further or competitive intensity leads to change in market share from other or weaker players.
Mahindra and Mahindra Ltd. is the only passenger car player growing at 18%. The capacity ramp-up has helped reduce booking and lower the wait time, which aided sales growth.
The new launch will open up a new avenue of sales, as it was absent from the compact SUV segment previously. The company’s pricing has been a positive, apart from the feature-rich product offering. The entry-level petrol/diesel variant price is priced Rs 50,000/Rs 23,000 lower than the outgoing XUV 300.
Nomura sees production at 9,000 units per month, with potential to go up to 10,500 units per month with minimal investment.
Two-Wheelers Shine
TVS Motors Co. reported a robust performance this month, growing upwards of 25%, as against the 16% estimate from analysts. Domestic sales have been strong, with scooters showing 24% growth. Electric vehicle momentum has continued for the company, with roughly 17,403 scooters sold, a whopping 179% growth from last year, despite subsidies being reduced after March 2024.
Hero MotoCorp Ltd. has shown a fresh upside of 35% versus analyst expectations of 23%. The company has mentioned that the Xtreme 125 and new Harley launch have aided sales.
Bajaj Auto Ltd.’s total sales grew 17%, while the much-needed growth of total exports has come in at 18%. While the domestic three-wheeler market has remained subdued this month, showing just 3% growth, exports in the segment grew by 20%. The company is also set to launch the Pulsar NS400 on Friday.
Eicher Motors Ltd. showed growth at 12%, which was higher than analysts' estimates. International business has been a key growth driver, up 61% as compared with the previous year.
Commercial Vehicles
VE Commercial Vehicles Ltd. had a blowout month in terms of sales, which fell 18% as compared with the previous year. The scenario was completely different for market leaders, especially Tata Motors Ltd.
Tata Motors has grown 31%, as compared with the low single-digit growth expected by analysts. The majority of the growth was in passenger carriers and intermediate-light commercial vehicles. Both of these segments have grown by upwards of 100%, indicating growth in intercity travel movements. The festivals of Navratri and Gudi Padwa also fell in the month of April, as compared with March in the previous year, which could have led to higher seasonal sales.
Ashok Leyland Ltd.’s bus segment was the key sales driver, growing upwards of 100% this month. Bus sales formed 16% of the total sales.
Outlook
New launches, quarterly earnings and commentary will be a key monitorable.
Apart from the Pulsar NS 400, Bajaj is also set to launch the updated Chetak during the year.
TVS has announced a premium electric scooter, with launches expected in the next two quarters.
The new Swift will be key for increasing compact car volume for Maruti Suzuki, while Mahindra's 3XO could be promising.
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