Retail gross sales in the course of the Navratras grew by mid-to-high single digits throughout areas at the same time as rural gross sales have remained muted, a brokerage agency mentioned in a report on the auto sector on Thursday.
The report by Motilal Oswal Monetary Companies additionally mentioned that over the last week of October, inquiries and bookings are seeing a slight enchancment for passenger automobile OEMs (authentic gear makers) particularly for Maruti Suzuki and Tata Motors.
“We noticed diverse demand tendencies in October, with two-wheelers and tractors exhibiting optimistic momentum and passenger and industrial autos witnessing reasonable demand. A greater monsoon helps drive optimistic sentiment in rural areas, although the sustainability of this demand stays to be seen,” the brokerage agency mentioned.
Total, two-wheelers carried out higher, with festive progress anticipated at 4-5 per cent year-on-year partially constrained by a excessive base, it mentioned. On the identical time, passenger autos may even see a fall within the festive season in comparison with the final yr, it mentioned, including that stock ranges are at the moment excessive for each two-wheelers and passenger autos, making Diwali gross sales a essential interval to gauge stock clearance.
Tractor volumes are recovering and are anticipated to carry out nicely within the second half of the present monetary yr. In industrial autos, sentiment improved sequentially, pushed by demand in sure industries, although a full restoration stays distant, it said.
Total, the brokerage agency mentioned, it expects dispatch progress for two-wheelers and tractors at 12 per cent and two per cent respectively whereas for the three-wheelers at 5 per cent. Nevertheless, passenger autos are anticipated to see a flat progress in volumes whereas industrial autos quantity may even see a 4 per cent year-on-year dip, as per the report.
It famous that the retail gross sales in the course of the Navratras grew by mid to high-single digits throughout areas we interacted. Rural gross sales have remained muted in the course of the Navratras however are anticipated to enhance throughout Diwali, it mentioned that over the last week of the continuing month, inquiries and bookings are seeing a slight enchancment for PV OEMs, particularly for Maruti Suzuki and Tata Motors.
In keeping with the brokerage agency, weak spot in industrial automobile demand persevered even in the course of the pageant with volumes anticipated to say no by round 5 per cent year-on-year. Nevertheless, the scenario nonetheless appears higher than final month as an enchancment in fleet utilization ranges in many of the areas was famous in the course of the month, it said.
Stating that it noticed enchancment in tractor demand, with volumes anticipated to develop 2-4 per cent year-on-year regardless of the delayed monsoon, the brokerage agency in its report mentioned that key states like Maharashtra, Karnataka, Telangana, and Andhra Pradesh skilled a roughly two-week delay in harvesting as a consequence of monsoon impression.
Nevertheless, sellers in southern areas have reported encouraging demand restoration in October. Alternatively, demand in northern areas is but to catch up and the identical is anticipated to materialize subsequent month, the brokerage agency mentioned.
Moreover, the federal government’s latest MSP improve by round 6 per cent for key crops like wheat, barley, and gram for the subsequent fiscal yr ought to assist optimistic sentiment within the tractor and rural markets, it famous.
