The domestic passenger vehicle industry experienced modest year-on-year (yoy) growth in wholesale volumes in June 2024, despite subdued retail trends, according to recent estimates.
Passenger Vehicles
Maruti Suzuki and Mahindra & Mahindra (M&M) led the passenger vehicle segment with double-digit yoy volume growth, signaling robust demand for their models. This positive performance stands out in an otherwise muted retail environment.
Two-wheelers
In the two-wheeler segment, wholesale volumes surpassed expectations. Hero MotoCorp notably reported a healthy double-digit increase in sales volume, reflecting strong consumer demand and effective sales strategies.
Commercial Vehicle
The commercial vehicle segment continued to struggle, showing a yoy volume decline due to ongoing weakness in the Medium and Heavy Commercial Vehicle (MHCV) segment. This sector's performance remains a concern amid broader industry challenges.
Agriculture Tractors
Domestic tractor volumes are estimated to have grown by a low single digit yoy in June 2024. This growth may be attributed to increased Minimum Support Prices (MSPs) for kharif crops and inventory buildup ahead of the season. However, June's rainfall was below the long-term average, and the progression of the monsoon needs close monitoring to assess future impacts on the agricultural sector.
Outlook
According to Arun Agarwal, VP& Analyst – Fundamental Research, Kotak Securities, the mixed performance across different vehicle segments highlights varying market dynamics. The passenger vehicle and two-wheeler segments show promise, driven by strong brands and consumer demand. In contrast, the commercial vehicle segment faces significant challenges, and the tractor segment's outlook remains closely tied to monsoon patterns and agricultural policies. Monitoring these factors will be crucial for stakeholders in the coming months, he added.
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