Auto Sales Mixed Trends In March: PVs And Two-Wheelers Race Ahead, While Tractors, CVs Lag

Automobile sales trends were mixed in March as passenger vehicles continued to witness growth, but tractors and commercial vehicles saw a decline.

Here is a look at the segmentwise performance:

Passenger vehicle dispatches were up 9% in March as compared with last year, according to Citi. The brokerage expects FY25 industry growth to be in mid-single digits.

PV sales for the three prominent players—Maruti Suzuki India Ltd., Mahindra & Mahindra Ltd. and Tata Motors Ltd.—showed growth, but was slightly lower than analysts' expectations.

Tata Motors' domestic sales were up 10% at 50,000 units, while Mahindra & Mahindra sales were up 13% at 40,000 units.

Maruti reported sales of 1.87 lakh, a 10% growth as compared with last year. This was slightly below analysts' expectations of 12%.

The company recorded its highest-ever annual domestic sales of 17.93 lakh units in FY24, while also reporting its highest-ever annual exports of 2.83 lakh units.

In the two-wheeler segment, the domestic motorcycle market grew 22%, while scooters saw a slower 2% growth, leading to downward sales momentum.

TVS Motor Co. sales rose 12% to 3,54,592 units, but missed average analysts' expectations of 19%. However, EV momentum was strong, with 15,250 units sold in March. Exports ended the year on a high, with a 22% rise at 91,972 units.

Hero MotoCorp Ltd. sales fell 5% in March, as compared with analysts' estimates of a 4% rise. Inventory levels are expected to be higher than other players, on the back of festive sales in April. The company expects higher double-digit growth for FY25, due to the 125cc segment doing well, premiumisation and EVs, according to Emkay Global.

Royal Enfield delivered 4.5% growth to 75,551 units, slightly lower than expectations of 7%. Recent competition from the likes of Triumph and Harley Davidson in the 400cc segment did not disrupt sales momentum for Eicher Motors Ltd., as per UBS.

Bajaj Auto Ltd. reported overall sales growth of 25% at 3,65,904 units. Two-wheeler sales were up 27% at 3.13 lakh units.

The company expects to launch the industry's first CNG-based bike for roughly Rs 80,000, said Managing Director Rajiv Bajaj, while speaking at the 'Bajaj Beyond' event recently.

Commercial vehicle sales tumbled during March, due to subdued demand.

Tata Motors' CV sales fell 10% to 42,262 units, as compared with an estimate of 7% decline.

While medium-to-heavy CV sales have been subdued, passenger carrier segment saw growth, albeit at a lower level, and was at 47% in March.

Ashok Leyland Ltd. sales fell 4%. However, this was lower than expectations of a 10% fall.

The bus segment saw a growth of 79% during the month.

Tractor sales also fell during the month, due to low demand.

M&M Farm Equipment reported a 26% year-on-year fall in sales at 26,024 units. Escorts Kubuta Ltd.'s sales were also down 16% at 8,587 units, in line with estimates. For FY24 as well, sales were down 7%.

The festive season, starting April, will be a key monitorable for the company.

Within the PV segment, EVs are likely to see new additions as Maruti is set to launch its first car in the space. The vehicle will be 4.3-metre long and will be in the mid-market SUV segment, according to Shashank Srivastava senior executive director at Maruti Suzuki.

For Tata Motors, PV demand is expected to remain strong, though the high base may restrict growth in FY25 to single digits, according to Emkay Global.

For M&M, new SUV launches will be needed for the next leg of growth.

Within two-wheelers, Bajaj Auto and TVS Motor have been active on premiumisation as well as electric vehicles, and their new launches in this space will be monitored. While for Hero MotoCorp, the momentum has been weak going into FY25.

For Tata Motors' CV segment, demand is expected to improve from the second half of Q2 FY25, on the back of supportive macros, Emkay Global said. The brokerage has a positive outlook on tractors, based on above-average monsoon expectations and higher Rabi wheat output.