In this article, we will be evaluating the performance of Auto Companies in March 2021 in terms of their sales.
Introduction:
This blog includes an analysis of the sales performance of Auto Companies in March 2021 of 4-Wheelers and 2-Wheelers as well. In this, we will be reviewing Auto Sales in March 2021 segment-wise, which will include Passenger Vehicles, Commercial Vehicles, Tractors, and 2-wheelers.
1) Passenger Vehicle (PV) Segment:
In this segment, there is overall growth in sales of Passenger Vehicles.
Key Drivers for PV Segment:
i) Strong momentum in demand.
ii) PV OEMs have a strong pipeline in bookings.
iii) Ramp up production with improved capacity utilization %
PV Sales- Growth:
- Sales growth of Auto companies on a YoY basis is looking very impressive. Because March 2020 was a gloomy month due to the Covid-19 pandemic and strict lockdowns in the country.
- Due to this reason, we will majorly focus on Month-on-Month Sales figures of Auto Companies. We will compare the performance of the companies with February 2021 sales.
- The highest growth has been registered on MoM basis is of Ford Motors which is 34% and next to it is Kia Motors with Sales growth of 15%. Renault with 12% growth is in 3rd position.
- These companies have recorded the highest growth in sales among all the auto companies due to their low base effect.
- If we consider the companies with large base effect, then Tata Motors has recorded the highest sales growth of 9% MoM. While the YoY growth of Tata Motors is 422%.
- Also, Tata Motors has reported the highest monthly car sales in the last 9 years in March 2021.
- Tata Motors is the only company with a large base effect which has grown actually in the last 1 year by 69%. In FY20 1.31 lakh cars were sold, which has grown to 2.22 lakh crore in FY21.
PVs Segment: March-21 Sales
Market Share- March 2021:
- Maruti Suzuki in the PVs segment has the largest market share of 45.6% and hence retains its first position.
- But, the important thing to notice here is that, in FY20, Maruti was having a market share of more than 50%, the company has lost a great amount of share YoY. Also, the monthly fall in market share is around 1.3% from Feb-21 to March 21.
- The second-largest player in PVs Sector is Hyundai Motors with 16.4%. This company has witnessed a fall of 0.3% in its market share MoM.
- Between losing of market shares of leading players, Tata Motors has increased its market share from 8.8% to 9.3% MoM and is the 3rd highest market share in the PV segment.
- Even KIA motors have registered growth of 0.6% in its market share from 5.4% in February 2021 to 6% in March 2021.
- Market Share of other players is: Mahindra and Mahindra gained 0.2% share MoM and is now having 5.2% market share. Toyota's market share stands at 4.7% in March 2021. In March 2021, Renault’s market share has increased by 0.3%, and currently, it is 3.9%.
- Among all the companies, Tata Motors seems to be the clear winners in terms of market share. Companies are having a vision of attaining 13%-13.5% market share in the next 12 months and then the company is also targeting its all-time high market share of 17%-18%.
Domestic PVs- Market Share
2) Commercial Vehicle (CV) Segment:
Growth Drivers for CV Segment:
i) Rebound in Industrial Activities.
ii) Momentum gain in Transport & Logistics.
iii) Replacement Demand (Rising Fleet Utilization [>70%]):
iv) Vehicle Scrappage Policy
CV Segment-Growth:
- Mahindra and Mahindra have reported the highest sales growth of 86% MoM in the CV Segment, which is quite good.
- Volvo (VECV) has also reported notable growth of 25% MoM and Ashok Leyland has a growth rate of 23% on monthly basis.
- Tata Motors sales have grown by 16% in the same period.
- Looking at YoY growth, the sales numbers and growth rate are phenomenal due to the low base effect.
- On Yearly basis, almost all companies have recorded a fall in sales between 20%-30% due to poor industrial activity.
Commercial Vehicle Segment- March 21 Sales Growth & Key Drivers
3) Tractors:
Growth Drivers for Tractor Sales:
i) All macroeconomic factors are in favor of agriculture.
ii) Rising Rural Income due to 2 consecutive normal monsoons, Higher MSP, Increased Liquidity.
iii) Rising Agri Output
Tractor-Growth:
- Mahindra & Mahindra has recorded growth of 122% YoY and MoM growth is 10%.
- Escorts' performance is also similar to the M&M, it has witnessed a growth rate of 124% YoY and 10% growth on monthly basis.
- Sales growth of M&M has grown by 18% between FY20 to FY21, while in the same period, Escorts have reported Sales growth of 24%.
- Tractor Business looks quite good where Escorts is a pure tractor business player and M&M involves combined play in the form of PV and CV.
Tractor- March 2021 Sales and Growth Drivers
4) 2- Wheeler Segment:
Growth:
- Companies under 2-Wheeler Segment have also reported significant growth year on year on account of the low base effect.
- But if we consider the growth on monthly basis, then HeroMotoCorp has witnessed 14% growth, Bajaj Auto has gone through de-growth of 0.6%, TVS Motors has also grown by 8% and Royal Enfield growth rate fell by 5% MoM.
- In yearly terms, the sales growth of almost all the companies have shown negative growth only exception here is for Here MotoCorp, as their Export has grown by 7% YoY.
2-Wheeler Segment- March 21 Sales
Exports:
- Hero MotoCorp has recorded growth of 55% MoM in Exports in March-21 sales.
- While Bajaj Auto has reported a fall of 19% on monthly basis in their exports in March-21. The reason for this can be the early closing of books on 20th March 2021.
- TVS Motors exports have grown by 18% monthly whereas Royal Enfield exports have grown by 29% in March 2021.
2-Wheeler Segment: Exports
Conclusion:
The sales growth reported across the PVs Segments, CVs Segments, Tractors, and 2-wheels indicates a positive sign in the auto sector. Also, this sector may receive the benefit of the PLI scheme introduced by the Government and Vehicle Scrappage Policy as well.