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Auto volumes end fiscal year on high, most OEMs report double digit volume growth in FY23!

ICICIdirect Research 03 Apr 2023 DISCLAIMER

What's Buzzing 

OEMs reported healthy wholesale dispatches for March 2023 with MoM growth witnessed across segments. The CV space outperformed its peers with high double digit MoM volume growth especially in the M&HCV domain while the 2-W space surprised positively with double digit growth for the month. On the other hand, the PV space reported flattish volume readings amid concerns over chip availability. Exports witnessed a comeback for the entire space in March 2023 with most OEMs reporting a healthy MoM recovery in volumes. 


In the 2-W pack, market leader Hero MotoCorp reported 31.7% MoM growth at 5.2 lakh units while Royal Enfield brand at Eicher Motors reported volume growth of 1% MoM at 72,235. In the PV space, volumes at Maruti Suzuki (MSIL) de-grew 1.3% MoM at 1.7 lakh units led by de-growth in Mini & Compact whereas UV sales reported highest ever monthly volumes during current fiscal at ~37,000 units. Volumes at M&M came in at 35,976 units, up 19% MoM while volumes at Tata Motors were at 44,225 units up 2.5% MoM. In the CV segment, market leader Tata Motors (TML) reported volumes of 46,823 units, up 28.1% MoM while Ashok Leyland reported 28.8% MoM growth in volumes to 23,926 units and Eicher Motors (VECV arm) reported volume growth of 63.3% at 11,906 units. In the tractor space, M&M posted 17.6% YoY volume growth at 35,014 units while Escorts reported 2.3% YoY growth at 10,305 units. 

Our Perspective 

Overall, for the industry, FY23 was an outstanding year, with healthy double digit growth across segments as well as most OEMs. The PV & tractor space needs special mention as these two spaces surpassed their previous highs and achieved a new peak of ~39 lakh units (up ~26% YoY) and ~9.4 lakh units (up ~12% YoY), respectively. On a full year basis, in the 2-W space Eicher Motors outperformed the rest of the pack with 38.6% YoY growth at 8.3 lakh units aided by new launches like Hunter 350 among others. M&M led the pack in PV space with 59% YoY growth at 3.6 lakh units riding on spectacular launches in SUV category with industry leader MSIL reporting ~20% YoY growth at 19.3 lakh units. In the CV space, Ashok Leyland led the volume growth in FY23 with sales volume at 1.9 lakh units, up 50% YoY while the same at industry leader Tata Motors was at 16% YoY at 4.1 lakh units. Going forward, we expect auto volume growth to taper in FY24E, albeit on a high base. We, however, continue to remain positive on PV (underpenetrated category domestically) and CV domain (beneficiary of robust government spending on infrastructure).

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