scorecardresearchEasing supply chain issues improve PV & CV taction; 2Ws Continue to be
Domestic passenger vehicle (PV) sales fell 4.87 percent.

Easing supply chain issues improve PV & CV taction; 2Ws Continue to be tepid: Report

Updated: 07 Apr 2022, 08:22 AM IST

Despite near-term headwinds, Axis Securities remains positive on the Automobile sector and expects sustained demand recovery in future.

FY22 was a difficult year for the auto industry on account of supply-chain challenges as well as RM headwinds, resulting in an increased total cost of ownership, says Axis Securities in a report.

The PV industry's wholesale volumes were steady in March'22, but it continued its sequential recovery (up 6% MoM), owing to improved chip availability, the report added.

The report further said that the 2W and tractor segments declined by 21% and 10% respectively on a YoY basis on account of muted demand and the high base of the last year.

CV segment, however, continued its strong performance and reported ~19% growth YoY. The CV segment volume recovery was led by a pick-up in economic activity and improving fleet utilization levels, it added.

March Auto Numbers

2W/3W Segment-

Hero Motocorp Mar’22 volumes declined 22% YoY to record total sales of 4.5 Lc units. Motorcycles de-grew by 19% YoY whereas Scooters sales were down 53% YoY. The company's exports witnessed a growth of 5% YoY to 34K units in Mar'22.

Bajaj Auto reported a 20% YoY de-growth in total sales to 2.9 Lc units, led by a 22% decline in 2W being partially offset by a 4% growth in 3 wheelers. Domestic sales were down 36% YoY whereas exports remained flat at 1.7 Lc units.

TVS Motors' total sales for Mar’22 stood at 3 Lc units, posting a 5% YoY decline. While the 2W segment de-grew by 5% YoY, the 3W segment witnessed a marginal 1% decline. Exports also remained muted, reporting a de-growth of 9% YoY to ~95K units.

Eicher Motors sold ~67K units of RE, registering a ~2% YoY growth in Mar’22. The sub 350cc models de-grew by 5% YoY whereas above 350cc segment bikes saw a strong growth of 58% YoY. While domestic volumes declined by 3% YoY, exports witnessed robust growth of 56% YoY to 9K units.

PV Segment

Maruti Suzuki posted total sales of 1.7 Lc units reporting a 2% growth YoY during Mar'22. The domestic sales de-grew by 7% YoY to 1.4 Lc units whereas the company recorded strong exports at 26K units. 

“The shortage of electronic components had a minor impact on the production of vehicles during the month, primarily affecting the production of vehicles sold in the domestic market. The company is taking all possible measures to minimise the impact”, the report added.

Mahindra's Auto division grew by 35% YoY to ~54K units. Its PV segment witnessed a strong growth of 65% YoY whereas the CV segment sales grew by 16%. The company sold ~4K 3Ws (including electric 3Ws) in Mar’22.

Tata Motors reported total sales of ~89K units registering a growth of 27% YoY. The PV sales grew by 43% YoY to ~42K units whereas the CV segment recorded sales of ~44K units, registering a growth of 20% YoY. The exports sales stood at 2.8K units

CV Segment

Ashok Leyland sold ~20K units, reporting a 17% YoY growth in the overall sales. The MHCV segment posted a growth of 26% YoY whereas the LCV segment remained flat. The sales were aided by a pickup in economic activities and infra push by the government.

VECV reported strong growth of 25% YoY in Mar’22 to 8,803 units.

Tractor Segment

M&M (Farm Equipment Sector) witnessed a de-growth of 4% YoY to 29K units, led by the high base effect of the last year. M&M expects continued government focus on agriculture, rural infrastructure, and higher cash flows with all-time high rabi sowing will lead to positive sentiments and an increase in tractor demand.

Escorts reported total sales of 10,074 units in Mar’22, registering an 18% YoY decline. While domestic sales de-grew by 19% YoY, exports declined by 2.6% YoY. Going forward overall high rabi sowing, good water level reservoirs, increased budget allocations to the agri sector and initial indicators of normal monsoon next year will drive positive momentum for the tractor industry.

Price hikes

Due to high input costs, original equipment manufacturers (OEMs) in the domestic market have already hiked the prices of their vehicles at least once in 2022. Skoda Auto had increased the prices of its vehicles in India by up to 3% in January.

Maruti Suzuki India (MSI) on Wednesday said it will increase the prices of its entire model range this month due to a rise in input costs. Since January 2021, Maruti Suzuki has taken four price hikes totalling almost 9%.

Mercedes-Benz India also announced an upward revision in the price of its entire model range effective April 1, 2022. The imminent price correction would be in the range of 3 per cent, across the entire model range, roughly translating to 50,000- 5 lakh, depending on the models.

Automakers in other segments like Audi and BMW, Tata Motors CV, and Hero MotoCorp have already announced a price hike in April.


Consumer sentiment in the domestic PV segment continues to be robust on account of the strong order backlog and easing chip shortage and supply chain issues, says Darshan Gangar, analyst at axis securities.

New product launches will help to drive excitement among buyers with the SUV segment likely to retain consumer traction. Moreover, improving demand in the Infrastructure and Construction sectors as well as improving freight availability along with increasing demand for e-commerce and last-mile delivery will support CV volumes moving forward, he added.

He further said that a sharp uptick in the CV volumes as economic activities pick up pace and financing and cash-flow constraints are iron out. The demand for 2Ws has been impacted primarily due to weak rural demand owing to the rising cost of ownership and higher fuel prices.

However, the inquiry levels in the domestic market are gradually improving and domestic 2W is to see recovery from FY23E onwards. While Tractor volumes are expected to be reasonably supported by rural sentiments and expectations of a normal monsoon, they will likely decline on a YoY basis due to a high base of the last year.

Despite near-term headwinds, axis securities remain positive on the Automobile sector and expect sustained demand recovery in future.

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First Published: 07 Apr 2022, 08:22 AM IST