An employee walks past frames for the BYD Co. S6 sport-utility vehicle (SUV) at the company’s assembly plant in the Pingshan district of Shenzhen, China (Photographer: Brent Lewin/Bloomberg)

Auto Makers Expected To Report Slow Festive Sales

Most auto companies are expected to report poor festive sales and an inventory build-up in November, according to a BloombergQuint poll of analysts.

Industry interactions indicate that passenger vehicle sales have been “flattish” which led to higher inventory levels, according to Kapil Singh, research analyst at Nomura. “We believe this should lead to slower wholesales in the month.”

The passenger vehicles sales growth is also likely to slow down because of a higher growth in the year-ago period.

Demands for trucks is expected to remain weak because of higher inventories, rising fuel costs and lower credit availability as non-bank lenders face a liquidity crunch. “Deferral in purchase decisions, coupled with stringent financing terms by leading NBFCs hurt retail sales,” Jinesh Gandhi, research analyst at Motilal Oswal Securities, said.

Two-wheeler sales, according to the poll, are likely to grow 6-8 percent on the back of demand from rural markets.

Here’s how Nomura expects automakers to perform in November.

Ashok Leyland

Adverse base and high inventory to affect wholesales.

Bajaj Auto

Domestic sales are expected to grow 40 percent; healthy export growth forecast.

Eicher Motors (Royal Enfield)

Volumes to improve as the strike at the Chennai plant ended.

Hero MotoCorp

Higher inventory, weak festive season sales to impact overall growth.

Mahindra & Mahindra

The launch of the Marazzo utility vehicle and favourable base to help; sales of light trucks and tractors to remain strong

Tata Motors

Sales of both trucks and passenger vehicles are expected to decline.

TVS Motor

Double-digit growth likely in both domestic and export markets.