With higher discounts by Original Equipment Manufacturers (OEM), passenger vehicles are expected to see growth in the low single-digit in March. The industry is expected to grow by 3 per cent year-on-year in the domestic market, according to Nuvama Institutional Equities.
“Passenger vehicle volumes are expected to grow slightly despite muted customer sentiment, owing to higher discounts and inventory build-up at dealers. OEMs have recently increased discounts and announced price cuts to support volumes,” mentioned Nuvama Institutional Equities.
businesslinehad earlier reported that Original Equipment Manufacturers (OEM) would increase their discounts with the rising vehicle inventory. In February, the inventory was between 50-55 days while the Federation of Automobile Dealers Association (FADA) had called out OEMs for dumping stocks at the dealer’s end.
According to analysts, pre-buying of passenger vehicles and the fall in stock markets have resulted in the softness in demand.
“We estimate total volume growth of 20 per cent year year-on-year for MM-Auto (includes PV, CV and 3W) to 82,000 units and 4 per cent for MSIL to 195,000 units, whereas a 3 per cent decline is likely for Hyundai to 63,500 and 2 per cent dip for TTMT-PV to 49,400 units,” states the report.
The two-wheeler industry is expected to grow by 3 per cent year-on-year while exports would grow in double-digits due to growth in Latin America and Africa.
The commercial vehicle segment is expected to see a marginal decrease in March.
“The industry volumes are anticipated to be slightly negative down by 1 percent year-on-year. On the positive side, E-Way Bill generation has been higher than last year, indicating better freight availability for transporters. On the negative side, selective financing by lenders and reasonable levels of fleet utilisation are limiting new vehicle additions,” added the report.