August auto sales preview: The overall auto sales in August are expected to grow, with passenger vehicles (PV) and commercial vehicles (CV) taking the lead in the sector, followed by two-wheeler (2W) and three-wheeler (3W), according to domestic brokerage firm Motilal Oswal. Tractor sales are expected to come flat month-on-month year-on-year (YoY) basis, it said.
In August 2022, the wholesale volumes are estimated to grow by 5%/51%/11%/27%/flat YoY for 2Ws/PVs/3Ws/CVs/Tractors, respectively, the brokerage house said.
It said that the PV wholesales are improving due to an improvement in semiconductor supplies and CV demand remains stable. While 2W retail demand was expected to pick up on August 2022, but the same has not yet materialized and Tractor retails are weak due to uneven rainfall.
Motilal Oswal prefers 4Ws (four-wheelers) over 2Ws on the back of strong demand and as it offers a stable competitive environment and expects momentum in the CV cycle to continue.
It also prefers companies with a higher visibility in terms of a demand recovery; a strong competitive position in; margin drivers, and balance sheet strength. In this regard, Maruti Suzuki and Ashok Leyland are the brokerage’s top OEM (Original Equipment Manufacturing) picks.
Key factors segment wise as per Motilal Oswal report
2Ws: July and August are considered weak months for 2W retails. However, an improvement was expected in Aug’22, given the mini festivals in some parts of India though Ganesh festival related demand is yet to come starts 31st Aug.
PVs: The waiting period for PVs has fallen due to improving semiconductor supplies. The manual variants for TTMT are readily available, while there is a waiting period for automatic variants.
CVs: Retails have been slow as August is a seasonally weak month. Demand from Cargo operators with long-term contracts remain buoyant. OEMs offering discounts to gain market share, but this is expected to be temporary. The recent hike in interest rates led to some adverse impact on demand.
Tractors: August remains a seasonally weak month for Tractors. Deficient rainfall in Uttar Pradesh, Bihar, and Jharkhand, led to lower Kharif sowing, thus affecting farmer sentiment. Agricultural demand is currently subdued, while Commercial demand is flat.
Stay connected with us on social media platform for instant update click here to join our Twitter, & Facebook
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Automobiles News Click Here
