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PV wholesale volume growth came in above our expectations driven by channel filling; however, CV and tractor segment volumes came in below our estimates in January 2024. Domestic 2W wholesale volumes witnessed >20% yoy growth driven by recovery in the rural segment, broadly in line with expectations. CV segment volumes declined by low-single digit yoy, whereas tractor volumes declined by mid-teens. PV segment volumes witnessed mid-teens improvement on a yoy basis in January 2024.

Domestic PV wholesale volumes grew by low-teens yoy in January 2024

As per our estimates, domestic PV industry wholesale volumes increased by low teens yoy driven by channel filling whereas retail sales grew by single digit during the month. MSIL’s total volumes improved by 16% yoy in January 2024, led by strong growth in the SUV segment, partly offset by decline in hatchback segment volumes. As per our estimates, Maruti Suzuki’s wholesales market share stood at ~42.7% (+10 bps yoy). Tata Motors reported 12% yoy improvement in PV volumes, whereas M&M’s volumes increased by 30% yoy in January 2024. Hyundai Motors reported 14% yoy growth whereas Toyota witnessed strong growth of 92% on a yoy basis in January 2024.

Domestic 2W wholesale volumes grew by >20% in January 2024

Domestic 2W wholesale segment volumes came in marginally below our expectations with growth of >20% on a yoy basis. Growth in the domestic market was driven by a steady demand trends and favorable base. Exports demand remained weak and witnessed decline on a mom basis. HMCL’s volumes increased by 22% yoy whereas TVS Motor reported a 23% yoy increase in volumes. Royal Enfield volumes improved by 2% yoy driven by 4% yoy increase in domestic volumes, partly offset by 20% decline in export volumes. Bajaj Auto reported 28% yoy increase in two-wheeler volumes driven by strong growth in domestic 2W segment in January 2024.

CV segment volumes came in below our expectations

Domestic CV segment volumes declined by low single digit yoy, which came in below our expectations. Tata Motors domestic CV volumes declined by 2% yoy, led by 11% yoy decline in the M&HCV trucks and (2) 7% yoy decline in SCV cargo segment, partly offset by 36% yoy increase in bus segment. Ashok Leyland reported a 7% yoy decline in volumes in January 2024. Also, VECV reported 2% yoy decline in CV segment volumes in January 2024.

Weak rural sentiment continues to impact demand for domestic tractor volumes

As per our estimates, domestic tractor industry volumes saw a low-teen decline yoy, owing to tapering of agriculture activities led by (1) a delayed harvesting season and (2) lower rabi sowing. Announcement of higher horticulture production, government support and improved Rabi sowing will support demand recovery in coming months. M&M and Escorts’ total tractor volumes declined by 17%/7% yoy, respectively, in January 2024.

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