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The wholesale volumes of two-wheelers for April are estimated to decline by 17 per cent month-on-month (MoM) due to regional lockdowns and uncertainties following to the second wave of Covid-19.
Most of the companies will declare their sales numbers on Saturday.
According to an automobiles report from Motilal Oswal Financial Services Limited (MOFSL), passenger vehicle (PVs) sales are expected to decline by seven per cent, commercial vehicles by 23 per cent, three-wheelers by 13 per cent and tractors by eight per cent.
Demand slows down
“Regional lockdowns (in nine States) and the uncertainties due to the second wave of Covid-19 has led to a slowdown in the demand momentum in April. PVs are better off on the back of a strong order book. Supply-chain constraints are leading to lower inventories for PVs and tractors, leaving scope to replenish inventory in coming months,” the report said.
The report said two-wheeler demand has been slowing, with inventory of 30-60 days at the dealers’ end, especially since the key marriage season and mini festival season are impacted due to the pandemic , resulting in inquiries declining by around 50 per cent.
And, with companies announcing temporarily shut down of manufacturing plants till mid-May, analysts believe that the MoM growth would further come down in the coming month.
Companies including Maruti Suzuki India, Toyota Kirloskar Motor, Hero MotoCorp and Honda Motorcycle & Scooter are temporarily shutting down their manufacturing facilities till May 15.
Two-wheeler wholesales
Meanwhile, the MOFSL report said dealers are also holding one-to-two months of inventory. It expects two-wheelers wholesales for Bajaj Auto to fall by 6 per cent MoM, TVS Motor by around 20 per cent, Honda Motorcycle & Scooter by 22 per cent and Royal Enfield by six per cent.
In the PV segment, bookings declined by 30-50 per cent while cancellations were around 10 per cent. Levels for PVs are below normal (less than 20 days), with a waiting period of 6-8 weeks in fast selling models. The waiting period has increased due to supply chain constraints at the manufacturer level, the report said.
In the tractors segment, the demand remains strong due to a bountiful Rabi harvest and ahead of Kharif sowing, supported by an expected normal monsoon. Both Mahindra & Mahindra and Escorts are operating at full capacity, it added.
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