Auto Sector Update - Auto Volumes : June 2021 By ICICI Direct
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Pandemic results in washout month…
May 2021 was a washout month for the domestic auto industry, with the sharp spike in Covid-19 cases taking a toll on economic activity amid localised lockdowns pan India. Plant shutdowns undertaken by OEMs along with supply chain challenges (particularly in relation to global semiconductor shortage) and only partial functioning of dealerships combined to result in a steep double-digit sequential decline across players and segments. It is worthwhile to note, however, that MoM comparison is not entirely meaningful on account of the difficult circumstances.
In the 2-W pack, market leader Hero MotoCorp’s volumes fell 50.8% MoM to 1.83 lakh units, with scooter sales down 87% and motorcycle decline placed at 47%. Eicher Motors’ Royal Enfield volumes were lower 48.8% MoM to 27,294 units. Bajaj Auto recorded 31% 2-W decline, with exports rescuing the performance (down 19% vs. 52% drop in domestic volumes) .
PV bellwether MSIL’s volume decline was dramatic at 71.2% MoM to 45,687 units, comprising similar ~75% drop in core mini & compact passenger car as well as UV segments. M&M’s UV volumes fell 57.4% MoM while for Tata Motors, PV decline was at 39.5% MoM to 15,181 units.
CV space was severely hit, with all major OEMs reporting >30% sequential decline. Market leader Tata Motors posted 31.5% decline to 11,401 units in which M&HCV truck decline was at 48%. For Ashok Leyland, total CV decline of 62% was surprisingly led by 69% drop in LCVs, while within M&HCV, truck portfolio fell 60%. Bus volumes were up sequentially for both players on a small base. VECV’s total sales were down 43% MoM while M&M’s <3.5T LCV segment posted 49% decline.
The tractor space outperformed the rest of the automotive pack. For market leader M&M, sales were down 12.1% MoM to 24,184 units. Escorts did better, reporting 8% decline to 6,423 units.
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