Mumbai, July 31
The automotive sector is poised for a robust performance in July 2024, driven by an expected double-digit year-on-year (y/y) growth in two-wheeler (2W) wholesale volumes, according to a recent report by Anand Rathi.
The surge is attributed to solid retail demand, estimated at approximately 15 per cent y/y, strategic inventory build-up, and a favourable base effect.
Excluding Honda, the growth remains robust at around 14 per cent. Additionally, passenger vehicle (PV) volumes are likely to have increased, supported by improved retail activity and inventory accumulation.
Meanwhile, sales of commercial vehicles (CVs) and tractors are expected to remain broadly flat. Overall, the outlook for the auto sector remains positive.
In the passenger vehicle (PV) segment, volumes are also expected to see an uptick, largely due to better retail performance and inventory accumulation.
The report predicts a slight growth of around 3 per cent y/y for PV volumes. On the commercial vehicles (CV) front, the outlook is more mixed.
The report forecasts that overall CV volumes will remain relatively flat, with a small drop of approximately 3 per cent y/y, primarily due to lower light commercial vehicle (LCV) volumes.
However, there are bright spots within the segment. Volumes for VECV's CVs are expected to have risen by 15 per cent, and the medium and heavy commercial vehicle (M&H CV) growth forecast has been revised upwards to high single digits from mid-single digits, driven by robust demand for buses and ongoing replacement demand.
The M&H CV segment is further bolstered by increased infrastructure and economic activity, as well as a favourable comparison base from Q1 and Q4 of FY24.