NEW DELHI: The auto industry may start its recovery journey in a linear manner. Analysts say that wholesales are expected to grow for two-wheelers, passenger vehicles and tractors in August 2020 owing to good demand, low inventory, a low base, and normalizing production over the months.
Analysts at Motilal Oswal estimate volumes to grow at 3.6 per cent/16 per cent for 2W/PV on account of sustained demand and inventory refilling. Tractor volumes are expected to grow at a stellar pace of 45 per cent year-on-year (YoY) on a low base and continued retail momentum.
However, volumes would decline 49 per cent YoY for commercial vehicles (ex-Tata) due to low demand. The report of gradual rise in sales come at a time when few executives beleive that real recovery is still out of sight and it is only the 'pent up demand' that is pushing sales.
"The majority of entry-level PV customers and urban 2W customers are purchasing vehicles for safety purposes, who otherwise may have avoided the purchase.Overall consumer sentiment has improved, but urban customers remain cautious given the uncertain environment," the Motilal Oswal report said.
The brokerage firm also noted that Maruti Suzuki India is in a comparatively better position than peers due to its entry-level portfolio. "Volumes are expected to grow by around 19 per cent for Maruti Suzuki (on a low base) and ~1.9 per cent for Mahindra & Mahindra’s UV (incl. pick-ups)," it added.