August Auto Sales Preview: TVS, Bajaj's Momentum Continues; M&M, Maruti And Tata Motors To Disappoint

Auto sales for the month of August are expected to be a mixed bag with certain segments like two wheelers continuing momentum, while tractors also might react positively post decent onset of monsoons.

Four-wheeler cars are expected to be muted this month, due to negative bias with only Mahindra & Mahindra Ltd. estimated to show some growth. Commercial Vehicles will also be subdued this month with hopes of some growth in LCV and bus segment.

Here is a look at what can be expected from the August sales figures.

The saving grace for the auto industry growth has been two-wheelers, especially in fiscal 2025. After posting low double-digit growth between April-June and July as well, companies might post growth but quantum might just be lower. This is because wholesales have grown faster than retails in this time frame and two-wheeler makers might have built in some inventory before the start of the festive season.

For August, TVS Motor Co. and Bajaj Auto Ltd. are expected to sustain growth momentum. TVS is expected to report high single digits and low double digits led by good growth in scooters and 125-cc push. Bajaj Auto is also expected to show good growth. Key to note will be its three wheeler growth. Hero and Eicher are expected to see a subdued growth.  

This month also saw launches from two-wheeler makers, with Ola Electric launching the electric bike and TVS launching the Jupiter 110 and Royal Enfield launching the Guerilla 450.

One thing to note will be if Ola Electric reports monthly sales numbers similar to other two-wheeler makers. However, brokerages haven’t given any estimates for the same yet.

Car makers are expected to report a flattish month on the back of subdued demand environment. This month has been active on the back of the multiple launches especially around Independence Day. Tata launched the Curvv EV priced upwards of 17 lakh with the petrol and diesel variant expected to be launched in September. M&M launched the Tharr Roxx, their five door variant of the iconic model.  

Most automakers are expected to have a subdued August, with inventory pressure still high. M&M’s growth has been trickling down to single digits. Both Maruti Suzuki India Ltd. and Tata Motors Ltd. have taken note of the inventory levels and have been reporting low single digit or flat YoY growth in the previous few months and the same is expected in this month as well.

Effect of new launches in sales will be visible starting next month.

Tractor makers such as Mahindra and Escorts Kubota Ltd. had a very interesting start. While M&M had a positive start since April, Escorts saw degrowth. To be fair the industry has been in a tough environment with monsoons bringing the much needed relief.

For August, Escorts will be a key talking point, reporting positive year on year growth for the first time this fiscal. It has been affected due to lower growth in North India, a key stronghold. M&M will continue its growth momentum and is expecting a strong second half growth.  

From April to July, M&M's sales grew by 6% while Escorts sales have fallen 3% compared to last year. Escorts has mentioned a better recovery in second half of this fiscal and August sales would be a key indicator on monsoon response on sales.

One of the differentiating factors is the strong sales show in Maharashtra and Karnataka, a region where M&M is the market leader. Along with Swaraj, where M&M owns 52% stake, they have a combined market share of 50% in western India. That has been one of the key differentiators as Escorts isn’t as strong here.

Management of Escorts has guided for increasing their focus in these states but the same won’t be easy.

CV makers are expected to have a slow month of sales and largely hope for better growth in light commercial vehicles and buses would be a key monitorable. Ashok Leyland Ltd. reported a 50% growth in sales of buses in first quarter, while Eicher also showed positive growth. Tata Motors LCV portfolio has been offsetting flattish demand environment in medium and heavy commercial vehicles.

Leading players like Ashok Leyland and Tata Motors are expected to report degrowth this month. The market for MHCV hasn’t picked up yet, and both companies are penciling in growth in second half of the year, if any. While industry performed better than expected in first quarter, better growth in infrastructure will pick up in second half only.

One key announcement we saw was Minister of Road Transport and Highways of India, Nitin Gadkari, meeting with Vinod Aggarwal, chief executive officer of Society of Indian Automobile Manufacturers. Automakers will extend discounts on new vehicle purchases against older scrapped vehicles. He mentioned that automakers would be open to giving discounts equivalent to 1.5-3% of the ex-showroom price. Specifically for trucks, discount will be there for vehicle with more than 3.5 tonne gross weight scrapped by the owner in the last six months, which will be equivalent to 1.5% of the ex-showroom price.