They counted rising Covid cases, semiconductor shortages and high fuel prices as key risks for the auto basket.
The commercial vehicle industry is expected to log a 5 per cent month-on-month growth in volumes. Analysts said OEMs are working toward increasing production levels to meet pending order book – several models have waiting periods ranging from 1-4 months.
Domestic personal vehicle (PV) volumes should grow 14 per cent month-on month (MoM) for Mahindra & Mahindra, 3 per cent for
and 1 per cent for Maruti Suzuki, said Emkay Global, while suggesting no change in discounts MoM.
“Domestic 2W volume performance should be better MoM: Volume growth is likely for TVS at 8 per cent, Bajaj Auto at 4 per cent, Hero Moto at 3 per cent and Royal Enfield’s at 2 per cent. Though demand is improving from salaried and business community customers, it remains weak from the student segment. Dealer inventory build-up continues in anticipation of the festive season in April,” Emkay said.
Meanwhile, the brokerage expects better tractor wholesales on strong retails and channel filling. It said domestic volumes for the segment should grow at 8 per cent MoM for Escorts and 7 per cent for Mahindra & Mahindra. Expectations of higher Rabi output and elevated crop prices are supporting rural customer sentiment, it said.
Nomura India said that the year-on-year growth trends might not be relevant over the next few months due to the disruption from Covid-19 related lockdowns over the March-July 2020 period.
In the tractor segment, it sees 120 per cent YoY growth for M&M, given the healthy demand trends. In the PV segment, Maruti is seen reporting a 104 per cent surge in YoY volumes.
In total, Nomura said the personal vehicle (PV) industry may see a volume growth of 129 per cent YoY. For two-wheelers, it forecast 74 per cent YoY industry volume growth in March.
“We expect FY21 volumes to decline 11 per cent YoY, followed by a likely recovery to 18 per cent in FY22 and 11 per cent in FY23. For MHCVs, both per-month retail sales and fleet operator profitability have been improving over the past few months. Hence, we estimate 445% y-y growth in March 2021. We factored in a 33 per cent YoY decline for FY21 volumes but given the low base, we expect a recovery to be much stronger at 85 per cent in FY22 and 25 per cent in FY23,” Nomura India said.