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Auto Sector Sales Review | Yadnya Investment Academy

Auto Sector Sales Review | Yadnya Investment Academy

Published on 07 April 2021 Views 81 Comments 0

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.