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Domestic PV industry sales grew by 2-4% YoY (20-24% MoM), largely due to strong domestic volumes from Maruti, Toyota, M&M, Kia and MG. The domestic CV industry sales grew by 3%/5% YoY/MoM. The 3W domestic wholesales 5%/10% YoY/QoQ respectively. The domestic tractor industry (proxy) witnessed 6% YoY volume growth, which was positively skewed mainly due to 15% YoY growth in M&M. In the 2W segment volumes remained slightly positive, with TVS, Eicher, and Suzuki reporting 10%/15%/9% YoY growth, respectively, while Bajaj reported a steep decline of 11% YoY in the domestic market.

PV Wholesale Nos: In Jan’25, PV OEMs' domestic wholesales (exhibit -2) grew by 2-4% YoY. Maruti Suzuki India's entry-level/SUV car segment grew by ~5% YoY, and total sales were up 6.5% YoY; domestic sales remained strong for Toyota, MG, and M&M as they delivered growth of 13%, 15% and 18% YoY, respectively. Tata Motors/Hyundai reported a 10%/5% YoY decline in domestic volumes.

CV Wholesale Nos: Our proxy for CV domestic dispatches was up 3%/5% YoY/MoM. In Jan’25, domestic volumes for VECV, M&M, and Ashok Leyland grew by 21%, 2%, and 3% YoY, respectively, while TaMo declined by 2% YoY, and MSIL reported 20% YoY growth (on a low base). We anticipate a low single-digit increase in FY25E across OEMs for CVs due to the high base effect and moderate replacement demand in the MHCV truck segment.

2W Wholesale Nos: Domestic volumes for Bajaj/Hero declined by 11%/2% YoY while TVS, RE, and Suzuki increased by 10%, 15% and 9% YoY, respectively (HMSI numbers awaited). In Exports, Bajaj, TVS, Hero, RE and Suzuki Motorcycles witnessed volume growth of 37%, 52%, 141% and 79% YoY, respectively. Going ahead, we expect domestic demand momentum may witness an uptick in (i) Rural uptick and (ii) New model launches (iii) Govt’s push on consumption (Tax relief for middle class).

Recovery in the tractor industry: Our proxy for domestic tractor industry sales in Jan’25 showed 6%/18% volume YoY/MoM growth. We anticipate increased demand momentum driven by kharif procurement, robust rabi sowing, enhanced water levels in reservoirs and Union Budgetary allocations.

In the near term, we believe the Auto Sector will witness consolidation across all segments. However, in the long run, we prefer TVS Motors Hero Motocorp in the 2Ws; M&M (non-coverage) as a play in the PV/LCV/tractor segment, followed by Maruti in PVs; we also monitor Ashok Leyland, Eicher (VECV) in the CV space for potential spurt in volumes.

2W/3W Segment

TVS Motors total 2W sales in Jan’25 were up by ~17.1%/23.6% YoY/MoM. 3W sales were up 3.9%/2.8% YoY/MoM respectively. TVS iQube sales stood at 25,195 units, up ~55% YoY.

Bajaj Auto’s total 2W sales in Jan’25 were up by 6.5%/20.7% YoY/MoM respectively. The CV sales were up 10.2%/3.3% YoY/MoM respectively.

Hero Motocorp The total sales for Jan ’25 were up 2.1%/36.3% YoY/MoM. (Scooter sales were up 35%/61.3% YoY/MoM, respectively).

RE total sales were up 19.6%/14.7% YoY/MoM.

PV & CV Segment

Maruti Suzuki’s total sales were up ~6.5%/19.1% YoY/MoM. The domestic sales were up ~5.5%/31.5% YoY/MoM.

Mahindra's PV division was up ~17.6%/22.3% YoY/MoM while LCV was up by ~1.9%/22.6% YoY/MoM.

Tata Motors total sales were down 6.8% YoY but up 2.7% MoM. The domestic PV sales were down 10.4% YoY but up ~8.6% MoM. The domestic CV sales were down 1.8%/7.1% YoY/MoM.

Ashok Leyland's total sales were up 8%/~1.5% YoY/MoM. Domestic MHCV was up 4.3% YoY, down 5.9% MoM.

Eicher Motors (VECV) total CV  sales were up ~20%/2% YoY/MoM, respectively.

Tractor Segment

M&M’s total tractor sales were up ~15.1%/20.1% YoY/MoM respectively.

Escorts Kubota Limited tractor sales were down ~6.7% YoY and up 21.9% MoM respectively; The ECE segment was down ~1.8%/37.7% YoY/MoM.

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