The report suggests that the major reason for the sluggishness in sales of tractors is the uneven spatial distribution of rainfall, particularly in northern and eastern regions.
It also highlights that growth will pick up in the coming months on the back of improved monsoon conditions. The upcoming festive season will also improve the situation as traditionally it is a peak period for auto sales. Strong festive demand could help offset some of the losses experienced in the first half of the fiscal year.
The weak wholesale figures in August were driven by private vehicles (PV), commercial vehicles (CV) and tractor original equipment manufacturers (OEM). Retail sales declined in single digits (yoy) for most of the companies.
The PV segment saw a low single-digit decline in domestic wholesale volumes year-on-year (YoY) in August 2024, driven by weak retail demand and elevated inventory levels at dealerships, which stood at approximately 70 days. The retail sales fell by mid-single digits YoY during the month.
Maruti Suzuki India Limited (MSIL), the largest player in the segment, reported a 4 % YoY drop in total volumes, including a 5 % decline in domestic sales but it was partially offset by a 6 % rise in the export volumes.
MSIL's wholesale market share is estimated to have slipped by 250 basis points YoY to approximately 40.5-4 % says the report.
Other major players also faced challenges in sales. Tata Motors recorded a 3 % YoY decrease in PV volumes, while Hyundai Motors reported an 8 % drop.
However, Mahindra & Mahindra (M&M) bucked the trend with a 16 % YoY increase in PV volumes, and Toyota India posted a significant 37 % YoY growth on low volumes. Kia and MG Motors also experienced an uptick in sales.
The two-wheeler (2W) segment showed resilience with high single-digit YoY growth in domestic wholesale volumes, largely driven by channel filling ahead of the festive season. Retail sales of the internal combustion engine (ICE) two-wheelers grew by mid-single digits YoY, while electric two-wheeler (EV 2W) sales surged by 41 % YoY, propelled by new mass-market EV launches and attractive discounts.
Among the key players, Hero MotoCorp (HMCL) saw a 5 % YoY rise in volumes, and TVS Motor reported a robust 14 % YoY increase, with growth in both domestic and export segments.
Bajaj Auto's volumes grew by 18 % YoY, driven primarily by domestic sales. However, Royal Enfield faced a 5 % YoY decline in volumes.
Going forward, the report highlighted that the Commercial Vehicle (CV) segment underperformed during the month, with domestic volumes declining by low double digits YoY, primarily due to weakness in the Medium and Heavy Commercial Vehicle (MHCV) truck and Light Commercial Vehicle (LCV) segments.
Tata Motors experienced a 15 % YoY drop in domestic CV volumes, with sharp declines in Small Commercial Vehicle (SCV) cargo (down 23 %) and MHCV trucks (down 15 %).
Ashok Leyland also reported a 7 % YoY decline in CV volumes, while VE Commercial Vehicles (VECV) managed a modest 1 % YoY increase.
In August, the domestic tractor segment remained flat YoY with volumes coming in 5-6 %.
During this period, M&M's tractor volumes grew by 1 % YoY, while Escort Kubota's volumes remained unchanged compared to the same period last year. The report says that strong festive demand could help offset some of the losses experienced in the first half of the fiscal year, particularly if economic conditions and consumer sentiment improve.
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