New Delhi – An above-average monsoon is fueling rural demand in India’s automobile sector, with continued momentum in tractor sales supported by a strong rabi harvest, according to a report released by HSBC Global Research on Tuesday.
Channel partner feedback indicates that an increased number of auspicious days for weddings, combined with the healthy rabi crop, has helped sustain the growth of two-wheeler (2W) sales in May.
Electric four-wheeler (e4W) market penetration rose to 3.4% in May. Tata Motors maintained a 35% market share, followed by MG at 31% and Mahindra & Mahindra (M&M) at 20%. Hyundai, with its newly launched ‘e-Creta,’ accounted for 5%.
Electric two-wheeler (e2W) sales also saw growth, with penetration reaching 6.1% and retail sales crossing the 100,000-unit mark. TVS led with 25,000 units sold in May, followed by Bajaj with 22,000 units. Ola Electric secured the third spot.
Passenger vehicle (PV) demand remained largely subdued, with no signs of near-term recovery. However, original equipment manufacturers (OEMs) continued to manage inventory levels responsibly.
“We expect PV discounts to remain high, given the weak demand outlook,” the report stated.
Among four-wheelers, Maruti Suzuki’s overall volumes increased by 3% year-on-year (YoY) in May. Although domestic sales declined by 6%, this was offset by an 80% rise in exports.
M&M reported a 21% YoY increase in SUV wholesale volumes, reaching 52,400 units. Tata Motors saw an 11% YoY decline in passenger vehicle volumes, although electric vehicle (EV) sales were up 2%. Hyundai’s domestic sales fell 11%, mainly due to scheduled plant shutdowns.
In the two-wheeler category, Bajaj’s domestic sales grew by 2% YoY, while exports surged 20%. TVS reported a 16% YoY increase in overall 2W sales, with domestic sales rising 14% and exports climbing 21%.
In the tractor segment, M&M’s domestic sales grew 10%, while Escorts saw a 2% decline. M&M’s tractor exports dropped 8%, but Escorts recorded a 71% rise in export sales.
“Early onset of the monsoon and above-average reservoir levels are positive indicators for the sector going forward,” the report noted.
In the commercial vehicle (CV) segment, overall volumes for major OEMs fell 3% YoY. Light commercial vehicle (LCV) sales declined 6%, while medium and heavy commercial vehicles (MHCV) and bus sales each grew 2%.
With inputs from IANS