ICICI Securities: Auto Wholesale Monthly Outlook - Dispatches Rise As Production Capacity Ramps Up

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.August 2020 dispatches are a sign of early festive kick-off (Onam, Ganesh Chaturthi) and original equipment manufacturer expectations of strong festive demand.However, channel inventory is likely to rise to near normal levels in September 2020 prior to second phase festive season in October 2020.Thus, we expect wholesales to start tracking retail trends post October 2020, sustained production growth would remain contingent on retail off-take.Another key monitorable would be the evolution of retail/channel financing post the lifting of moratorium.Two-Wheeler festive kick starts across few regions-Hero MotoCorp Ltd. reported sales of approximately 584k units, up 8% YoY. Domestic motorcycles outperformed scooter as it grew approximately 9% vis-a-vis 11% decline for the latter.The company is operating at approximately 100% production capacity with almost all its customer touch points operational.The recent launch of Hero Xtreme 160R has been well received and led to an increase in market share in the premium segment.Passenger vehicles (PVs): Demand growth optically better due to low base effect-Maruti Suzuki India Ltd.’s demand revived at 17% growth YoY to approximately 124k units with mini-vehicle segment posting strong growth of 95% YoY to approximately 19.7k units (aided by low base effect), while compact segment grew 14% YoY to approximately 62k units.Ciaz volumes slumped 23% to 1,223 units. Utility vehicles (UV) segment volumes grew 13% YoY at approximately 210k units (no clear sign of downtrading yet as UV growth continues to remain strong).Despatches to Toyota fell 41% to 1,379 units. Exports, too, dropped 15% to approximately 8000 units..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

ICICI Securities: Auto Wholesale Monthly Outlook - Dispatches Rise As Production Capacity Ramps Up

ICICI Securities expects auto wholesales to start tracking retail trends after October.

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