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In Feb-23, auto volumes exhibited a mixed performance. While growth in PV wholesales for major players moderated to ~11% YoY, reflecting slowing retail trends (~8% YoY, as per Vahan), the tractor industry surprised positively with 23- 25% YoY growth. Within 2Ws, domestic retails/wholesales have shown recovery with ~16%/over 20% yoy growth partly also supported by low base (ABS-related supply-chain issues last year). Exports remained affected across 2W players, with a 40-52% YoY decline. The E-2W industry continued to witness consolidation (penetration levels hovering at 5.0-5.2%; share of major OEMs rising) with TVSL being an outlier with over 15,000 wholesales. MHCV growth remained healthy, supported by pre-buying ahead of BS-VI phase-2 norms (effective Apr-23) and associated price hikes; AL continued to gain share. Growth in buses and 3Ws rebounded strongly with the re-opening of the economy.

Growth in wholesales for major PV players moderated to ~11%, reflecting slowing retails: Growth in PV retails (as per Vahan) moderated to ~8% YoY (vs. >18% growth YTD). While demand for the recent SUV launches across the industry remained strong with a huge backlog, supply-chain issues and weak demand for the entry-level car segment continue to be a challenge with rising discounts. This has constrained wholesale growth for PVs to ~11% YoY. Among OEMs, wholesales growth stood at 8% for MM, 5% YoY for MSIL, and 3% for TTMT.

Tractor industry surprised with strong 23-25% YoY growth: Demand is being supported by better consumer sentiments (strong rabi crop acreage for wheat and oilseeds, high crop prices, and better terms of trade) in the farming community. Among players, M&M/Escorts witnessed 26%/28% YoY growth, respectively.

Domestic 2Ws witness healthy growth; Sharp decline in exports continues: Domestic 2W retails/wholesales grew by 16%/20%. Export volumes across key players have continued to decline sharply with a likely revival during 1QFY24E (as per BJAUT media interview). Among players, wholesale growth stood at 20% for EIM-RE and 10% for HMCL, while it declined by 2% for TVSL and 11% for BJAUT

Domestic CV industry continued the uptrend with ~11% YoY growth, supported by growth in both the passenger and cargo segments. Demand in the cargo segment was also supported by pre-buying ahead of the implementation of RDE/OBD2 norms effective Apr-23. On a YoY basis, domestic volumes grew by 34% for EIM-VECV, 32% for AL, 4% for TTMT, and 3% for MM.

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