Automobiles Channel Check - Mixed Demand Trends; Outlook Positive: Nirmal Bang

Nirmal Bang Report

We interacted with various channel partners across passenger vehicle/commercial vehicle/two-wheeler/tractor segments to ascertain retail demand, discounts, supplies, stock levels and any distinguishing trends in retails.

We interacted with various dealers in the key regions of Central, Northern and Western India.

Our interactions with the dealers indicate mixed demand trends across segments. The retails are expected to remain strong for PVs, driven by the high order backlog, but the discounts are back for some slow-moving models to clear up inventory.

We also note that the waiting periods are declining with supply chain issues getting resolved to a large extent. Our interactions indicate 8-10% YoY growth in retails for PVs.

However, two-wheeler demand still continues to be affected by a delayed recovery in the rural markets and it is expected to decline by mid single digit.

In CVs, demand remains robust for both cargo as well as passenger segments. Furthermore, freight availability also remains good, thus driving retail volume growth. Tractor sales witnessed strong mid single digit growth in retails in Feb-23.

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