Automobile Sector Performance

Automobiles are one sector highly tracked by the investor fraternity. There are reasons behind the same, while the sales figures of commercial vehicles are considered as the primary indicator for revival of the economy. The motorcycles sales indicate how the rural scenario is? Further the four wheeler segment has a lot of interest with significant exposure of FIIs in the sector. It is true that there are factors like fuel cost that make an impact on the sales numbers as well. And with the rising fuel price there was expected to be some impact on the overall sales figures in the automobile segment. As the June 2021 month sales numbers are out let’s have a detailed look at the numbers.

While we are analysing the automobile sales numbers for the month of June 2021, there are few factors that we need to understand. Sales numbers for the Month May 2021 were comparatively lower and even June 2020 was a once in a century kind of scenario (on account of lockdown restrictions). Though the numbers are not comparable, here is the number crunching for the automobile sector for the month of June 2021.

We have segregated it in different segment viz – two wheelers, Passenger Vehicles (PV), Commercial Vehicles (CV) and tractors. Let’s start with the two wheeler segment (2W).

2W	Jun-21	Jun-20	YoY (%)	May-21	MoM (%)	FY22YTD	FY21YTD	YTD (%)
Bajaj Auto	1,55,640	1,46,695	6.10	60,342	157.93	3,42,552	1,85,981	84.19
HMCL	4,38,514	4,30,889	1.77	1,59,561	174.83	9,40,689	5,39,737	74.29
TVS	1,45,640	1,45,264	0.26	52,215	178.92	3,42,443	1,86,463	83.65
Royal Enfield	35,815	36,510	-1.90	20,073	78.42	1,02,449	54,939	86.48

In the 2W segment, Bajaj Auto is the one that has managed to post best growth figures on YoY basis. It is followed by Hero MotoCorp with lower single digit growth of 1.77 percent on YoY basis. As an analytical practice the figures are also compared on a Month on Month basis. However with India facing a very disruptive second wave of Covid -19, majority of the states were under lockdown in May 2021. As a result the sales growth on the MoM basis does not depict the right picture. Usually the Year to date basis numbers showcase a rational picture. But here also the FY21 was marred by the nationwide lockdown. As regards the other numbers, while TVS Motors has remained almost flat on YoY basis and Royal Enfield witnessed negative growth.

As regards the company wise sales numbers following tables show detailed figures.

Hero MotoCorp	Jun-21	Jun-20	YoY (%)	May-21	MoM (%)	FY22YTD	FY21YTD	YTD (%)
Motorcycles	4,41,536	4,18,141	5.6	1,78,076	147.9	9,58,941	5,24,179	82.9
Scooters	27,624	33,842	-18.4	4,338	536.8	64,918	40,486	60.3
Total	4,69,160	4,51,983	3.8	1,82,414	157.2	10,23,859	5,64,665	81.3
Domestic	4,38,514	4,30,889	1.8	1,59,561	174.8	9,40,689	5,39,737	74.3
Exports	30,646	21,094	45.3	23,483	30.5	83,800	24,928	236.2

In the case of Hero MotoCorp the motorcycles had single digit growth on YoY basis. The Scooters Segment witnessed a decline of 18 percent on YoY basis. However on the lower base the MoM figures were better placed. We feel in the last year despite the lock down affecting the urban Demand, the rural demand was intact in the 2W segment making a higher base in FY21 as well because of the pent up demand – April’20 had 0 sales and May’20 was 20-25% of normal run rate. It is the exports that helped the company show some growth on YoY and MoM basis.

Bajaj Auto	Jun-21	Jun-20	YoY (%)	May-21	MoM (%)	FY22YTD	FY21YTD	YTD (%)
Domestic	1,55,640	1,46,695	6.1	60,342	157.9	3,42,552	1,85,981	84.2
Exports	1,54,938	1,08,427	42.9	1,80,212	-14.0	5,56,753	2,13,948	160.2
Total 2w	3,10,578	2,55,122	21.7	2,40,554	29.1	8,99,305	3,99,929	124.9
Domestic	6,196	4,494	37.9	488	1169.7	14,585	5,282	176.1
Exports	29,362	18,481	58.9	30,820	-4.7	92,124	37,892	143.1
Total 3W	35,558	22,975	54.8	31,308	13.6	1,06,709	43,174	147.2
Domestic	1,61,836	1,51,189	7.0	60,830	166.0	3,57,137	1,91,263	86.7
Exports	1,84,300	1,26,908	45.2	2,11,032	-12.7	6,48,877	2,51,840	157.7
Total Sales	3,46,136	2,78,097	24.5	2,71,862	27.3	10,06,014	4,43,103	127.0

In the case of Baja Auto also the base for FY21 was higher. But the FY22 numbers have also been very good. Bajaj has one of highest export contribution for all 2w cos and  the exports segment has helped the company post strong performance in the 2W as well as 3W segment. Again there is some difference in Bajaj Auto numbers as compared to peers on MoM basis as the company on MoM basis has witnessed decline in percentage terms on export front due to factors like supply chain disruption.

TVS Motors

In the case of TVS Motors it is the motorcycle segment that has provided good growth on the YoY and MoM basis. Even the 3W segment has provided strong performance on YoY and MoM basis. Mopeds and scooters witnessed decline on YoY basis.

TVS Motors	Jun-21	Jun-20	YoY (%)	May-21	MoM (%)	FY22YTD	FY21YTD	YTD (%)
Motorcycle	1,46,874	84,401	74.0	1,25,188	17.3	4,05,289	1,19,307	239.7
Scooters	54,595	65,666	-16.9	19,627	178.2	1,39,435	81,786	70.5
Mopeds	36,623	41,009	-10.7	9,601	281.4	86,767	54,335	59.7
2w (Total)	2,38,092	1,91,076	24.6	1,54,416	54.2	6,31,491	2,55,428	147.2
3w	13,794	7,311	88.7	12,473	10.6	39,057	11,505	239.5
Sales volume (2w+3w)	2,51,886	1,98,387	27.0	1,66,889	50.9	6,70,548	2,66,933	151.2

Passenger Vehicle Data

The passenger vehicle (PV) sales numbers were better than the expectations. While the YoY figures were anyway ahead of street estimates on account of lower base, even the MoM figures have been very strong.

PV	Jun-21	Jun-20	YoY (%)	May-21	MoM (%)	FY22YTD	FY21YTD	YTD (%)
Maruti Suzuki India	1,30,348	53,139	145.30	35,293	269.33	3,08,095	66,864	360.78
Hyundai	40,496	21,320	89.94	25,001	61.98	1,14,499	28,203	305.98
Renault	6,100	4,634	31.64	2,620	132.82	17,362	6,387	171.83
M&M (PV)	16,913	8,075	109.45	8,004	111.31	43,202	11,942	261.77
Toyota	8,801	3,866	127.65	707	1144.84	19,130	5,505	247.50

If we take a look at the growth numbers Maruti Suzuki India has posted the highest growth. And on the back of the same stock moved upwards

As regards the performance of Maruti Suzuki, Company’s mini segment grew by 67 percent YoY and 266 percent MoM to ~17.4k vehicles. Compact sales increased by 158 percent YoY and 238 percent MoM to 68.8k units. Mid-Size sales grew by 9 percent YoY and 73 percent MoM to 602 units. The waiting period for most of the models range from 2 to 6 months. Domestic sales increased by 141 percent YoY and 274 percent MoM to 126.2k units. As regards the demand, one can expect demand to recover on the back of pent up demand and preference for personal mobility as the Covid-19 lockdown fears still loom. Moreover high waiting period also helps with wholesale numbers. Following data clearly shows how the overall numbers have been for the company.

Maruti Suzuki (India) – Sales Figures June 2021

M&M

In case of M&M the Utility Vehicle (UV) sales increased by 109 percent YoY and 115 percent MoM. In case of commercial vehicles (CV) sales increased by 21 percent YoY and 75 percent MoM. Overall auto division domestic sales increased by 70 percent YoY and 89 percent MoM. With the opening of economy in phased manner the demand has started to come back from both Rural and Urban markets. As 2nd Covid wave curves continue to flatten the management expects strong recovery in coming months. The company’s supply chain is normalizing and the only problem remains is the global semi-conductor shortage. The New Thar has waiting period of ~10 months and current booking stands at around 55000 units.

As regards the other segments, the Tractor sales and CV sales the performance has been in-line with the street expectations.

As regards the other segments, the Tractor sales and CV sales the performance has been in-line with the street expectations.

CV	Jun-21	Jun-20	YoY (%)	May-21	MoM (%)	FY22YTD	FY21YTD	YTD (%)
Ashok Leyland	6,448	2,394	169.34	3,199	101.56	17,987	3,814	371.60
VECV	2,438	1,358	79.53	1,223	99.35	5,806	2,129	172.71
Tractors	Jun-21	Jun-20	YoY (%)	May-21	MoM (%)	FY22YTD	FY21YTD	YTD (%)
M&M	46,875	35,844	30.78	22,843	105.21	95,848	64,577	48.42
Escorts	11,956	10,623	12.55	6,158	94.15	24,500	17,690	38.50

Overall the performance of the automobile sales Figures have been in line With street estimates. However the numbers are not indicative of any particular trend and cannot be taken as a base to form a firm opinion. Along with the above numbers we are providing sales figures for other companies like Eicher Motors, Ashok Leyland and Escorts.

Eicher Motors	Jun-21	Jun-20	YoY (%)	May-21	MoM (%)	FY22YTD	FY21YTD	YTD (%)
Domestic	35,815	36,510	-1.9	20,073	78.4	1,04,677	54,939	90.5
Export	7,233	1,555	365.1	7,221	0.2	18,963	2,330	713.9
Total RE	43,048	38,065	13.1	27,294	57.7	1,23,640	57,269	115.9
VECV	2,438	1,358	79.5	2,145	13.7	5,806	2,129	172.7

Ashok Leyland	Jun-21	Jun-20	YoY (%)	May-21	MoM (%)	FY22YTD	FY21YTD	YTD (%)
M&HCV Goods	2,289	559	309.5	1,428	60.3	7,520	710	959.2
MH&CV Passenger	75	13	476.9	85	-11.8	340	13	2515.4
LCV	3,487	1,560	123.5	1,225	184.7	8,690	2,686	223.5
Domestic	5,851	2,132	174.4	2,738	113.7	16,550	3,409	385.5
Exports	597	262	127.9	461	29.5	1,437	405	254.8
Total Sales	6,448	2,394	169.3	3,199	101.6	17,987	3,814	371.6

Escorts	Jun-21	Jun-20	YoY (%)	May-21	MoM (%)	FY22YTD	FY21YTD	YTD (%)
Domestic	11,956	10,623	12.5	6,158	94.2	24,500	17,690	38.5
Export	577	228	153.1	265	117.7	1,435	460	212.0
Total	12,533	10,851	15.5	6,423	95.1	25,935	18,150	42.9

 

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