Except two-wheelers, all auto segments gain

The auto sector reported a mixed set of volume numbers in February 2021. Based on the commentary from industry leaders, the industr y continues to face supply-chainrelated constraints. Higher commodity prices also mean the increased cost of vehicles.

Based on the Februar y sales figures, the Passenger Vehicle industr y has come out stronger with double-digit domestic volume growth. The domestic 2Wheeler segment reported muted volume growth. However, it was partly offset by strong export momentum. The tractor segment demand continues to remain buoyant. Domestic CV passenger carriers and 3W segments remain under pressure.

Strong wholesale demand from domestic PV segment:

Among the PV segment, Maruti’s overall volumes increased by 12% YoY in February 2021. It was led by positive sentiments in domestic and export segments.

Tata Motors reported 119% YoY growth in domestic PV volumes while M&M's PV segment reported a growth of 41% in February 2021.

Among the other manufacturers, Hyundai Motors' domestic volumes increased by 29% in February 2021. Honda Motor's domestic PV volumes increased by 28% while Toyota India's domestic PV volumes increased by 36% in February 2021.

The volume growth was led by strong demand for new launches, shif t towards personal mobility, and inventor y building.

Weak domestic sentiments for twowheelers: Bajaj Auto reported 6% YoY growth in total volumes led by 12-17% growth in export for 2W and 3W segments. However, the company's domestic per formance was hugely disappointing. It reported 1% YoY growth in the domestic 2W segment while the domestic 3W segment declined by 27% YoY. Domestic demand remained tepid even for Hero Moto. Its overall volumes increased by 1% YoY in February 2021. There was a 3% YoY decline in the motorcycle segment and 121% YoY increase in the scooter segment.

As for Royal Enfield, Februar y was a good month as its volumes increased by 10% YoY, led by 6% YoY increase in domestic volumes and 94% YoY increase in export volumes. CV segment continues to recover:

Tata Motors’ domestic CV volumes increased by 2% YoY led by 29-30% YoY increase in M&HCV and SCV cargo & pick-up segments. I&LCV segment also reported strong growth of 68% YoY. However, demand for buses continues to remain muted with a 63% YoY decline in passenger carriers.

Tractor demand remains buoyant:

Demand for tractors continues to grow even on a high base due to record Rabi sowing, healthy reservoir levels, and higher liquidity with farmers.

Closing comments:

The sales data of Februar y 2021 indicates marked improvement in demand across all the vehicle categories except twowheelers.

The momentum is improving consistently for commercial vehicles due to the pick-up in economic activities. Tractors also continue to do well despite the higher base as Agri activities continue to grow.

Even passenger vehicles are growing on the low base of last year. They are not impacted by the rising cost of petrol and diesel as customers have the option of switching to CNG variants.

However, the same is not the case of twowheelers. Hence, the impact of the rising cost of fossil fuels is most visible here.