Automobile Sept 2021 Volume Preview: 'Uptrend to continue in CVs, PVs to be hit by chip shortages'

"Tractor volumes are likely to decline due to a high base. We expect domestic volumes to decline by 15% for MM and 17% for ESC." Representational pic from Reuters

Ahead of release of the automobile sales data for the month of September 2021, a volume preview for the sector suggests that uptrend will continue
in commercial vehicles (CVs), while other segments to witness a decline. The Sep’21 volume preview on automobile sector by Emkay Global Financial Services Ltd., says, "Our channel checks indicate that CVs should maintain positive momentum in Sep’21. PV volumes are likely to be hit by the chip shortages, despite a healthy order book. 2Ws and Tractors are likely to decline due to a high base on account of inventory filling last year."

'Positive view on auto sector'

The report adds, "The upcoming festive season and improving chip supplies are expected to support volumes ahead. We retain a positive view on the auto sector, underpinned by expectations of a cyclical upturn in the next three years."

TRENDING NOW

Here is company-wise Volume Snapshot:-

Here is Segment-wise volume expectations (domestic):-

Key points to know from Emkay Global Financial Services' Automobile Sept 2021 Volume Preview:-

- "CV industry volumes are expected to improve, aided by healthy freight availability (over 2.1mn E-way bills generated per day, which is higher than pre-Covid levels) and better freight rates. Channel checks indicate that volumes are aided by Tippers, ICVs and some replacement demand for MAVs. We expect domestic volume growth of 36% yoy for EIM, 18% for TTMT and 17% for AL. MM is likely to see a 23% fall as chip shortages affect dispatches."

- "2W industry volumes are likely to be significantly lower compared with last year due to a high base on account of inventory filling. In addition, chip shortages have affected dispatches for premium motorcycles. We expect domestic volumes to decline by 19% yoy for TVSL, 23% for BJAUT, 33% for HMCL and 50% for EIM-RE. Exports are likely to witness positive growth due to healthy demand and stable currency rates in key markets."

- "PV industry volumes should fall notably due to supply-related challenges. PV industry wholesales are expected to decline ~43% to 167,000 units. Retails are likely to be higher than wholesales by ~30%. We estimate domestic volumes to decline by 6% for TTMT, 26% for MM and 57% yoy for MSIL. Production is expected to improve notably in Oct’21 due to better chip supplies."

- "Tractor volumes are likely to decline due to a high base. We expect domestic volumes to decline by 15% for MM and 17% for ESC."

TAGS:

Automobile Markets