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NEW DELHI:
Gross sales for two-wheelers and tractors will probably be weak in February given subsiding demand however business and passenger automobile outlook is constructive, analysts tracing the auto sector stated.Auto corporations are scheduled to report gross sales information for February from Tuesday onwards.
“Our current trade and vendor interactions point out that retail demand has remained subdued, particularly in two-wheelers (2Ws). Passenger automobile (PVs) gross sales have been bettering, with enhancements in chip provides,” stated analysts at Nomura.
“Nonetheless, the demand appears to be skewed in the direction of CNG and new launches, the place provide constraints have been impacting gross sales. We have now been involved in regards to the weak spot in mass segments. We imagine a possible rise in gasoline costs in March-22 might enhance draw back dangers to our estimates.”
Analysts are envisaging a Rs 8-10 per litre gasoline worth hike as quickly as ongoing meeting elections are over. There was an unofficial ban on gasoline worth hike in India for over three months now.
PVs: Enchancment in quantity
Analysts count on PV quantity to enhance sequentially, led by easing provide constraints. Brokerage home Nirmal Bang stated it expects the PV section to get better quicker on the again of easing lockdown restrictions, sustained demand, low stock ranges and excessive ready intervals.
CVs: Ashok Leyland to emerge as winner
Business automobiles are one other section that’s seeing constructive traction. Analysts see the quantity momentum persevering with because the underlying demand drivers stay intact albeit rising gasoline costs stay a ache level. Additional enchancment in freight utilization (as financial actions collect tempo) and secure demand from infra and building sector ought to assist demand for CVs within the coming months.
“Enhancing freight charges proceed to learn fleet operator profitability. Trade retail gross sales could possibly be up 20 per cent yoy in Feb 2022, on our estimate,” stated Nomura, including it expects Tata Motors to report 4 per cent yoy progress, whereas the identical for Ashok Leyland and Eicher Motors will probably be up 12 per cent and 6 per cent, respectively.
2W: Quantity to take a plunge
Analysts are observing 2W dispatches bettering barely on MoM foundation however they may stay muted on YoY foundation because of weak shopper sentiments. Although a gradual opening up of academic institutes, places of work and many others, and upcoming marriage season can assist the demand going forward.
Tractors: Moderating progress
Approaching excessive base, the gross sales progress for tractors might even see a drop. Although analysts stated rural sentiments are comparatively robust and a superb rabi crop ought to augur nicely for the tractor trade within the coming months. “The expansion momentum could possibly be restrained by the peaking tractor demand cycle,” stated Nirmal Bang.
Additionally Learn:
The Business Automobile (CV) trade has been one of many vibrant spots in an in any other case difficult yr for the auto trade. Whereas the Auto trade de-grew by (1%), the CV trade grew by over 30% (as much as Q3 FY22), although in opposition to a low base final yr. Are the current gross sales numbers within the business automobile trade an aberration or step one on the trail of a sustainable restoration?
The decline in gross sales quantity within the present monetary yr is anticipated on an already-low base after two consecutive years of decline — at 13 per cent in fiscal 2021 and 18 per cent in fiscal 2020, the home rankings company stated in a press release.
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