New Delhi, June 3 (IANS) The above-average monsoon is driving rural demand for the Indian automobile sector, and tractor demand maintains momentum following the good rabi harvest, a report showed on Tuesday.

Channel partner commentary signals the higher number of auspicious days for marriage and a good rabi harvest sustained two-wheeler (2W) growth momentum in May, reports HSBC Global Research in a note.

Electric four-wheeler (e4W) penetration increased to 3.4 per cent in May. Tata’s market share remained at 35 per cent, with MG at 31 per cent and M&M at 20 per cent. Hyundai with its ‘e Creta’ model was at 5 per cent.

“Meanwhile, e2W sales penetration increased to 6.1 per cent with 100,000 units in retail sales. TVS’s retail in May totalled 25,000 units, while Bajaj’s sales were at 22,000 units. Ola is in the third spot,” according to the note.

Passenger vehicle (PV) demand was largely muted and there are no signs of recovery any time soon. Positively, original equipment manufacturers (OEMs) maintained inventory discipline.

“We expect the PV discount to stay elevated around the current level amid a weak demand outlook,” said the report.

In four-wheelers, Maruti’s volumes were up 3 per cent on-yar in May, as a 6 per cent decline in domestic sales was offset by 80 per cent growth in exports.

“M&M’s SUV wholesale was 52.4k units, up 21 per cent YoY. Tata’s PV volumes were down 11 per cent YoY, with EVs up 2 per cent. Hyundai domestic sales were down 11 per cent, mainly from routine plant shutdowns,” the note mentioned.

In the 2W segment, Bajaj’s domestic 2W volume was up 2 per cent, while exports were up 20 per cent. TVS’s 2W volumes were up 16 per cent YoY, with domestic growing 14 per cent and exports at 21 per cent.

In the tractor segment, M&M’s domestic volume grew by 10 per cent, while Escorts’ declined by 2 per cent. M&M’s exports declined by 8 per cent, while Escorts’ grew by 71 per cent.

“Early advancement of monsoons and above-average reservoir levels are positives going forward,” said the report.

In the commercial vehicle (CV) vertical, volumes for key OEMs were down 3 per cent on-year and the subsegments’ LCVs were down by 6 per cent, while MHCV and buses each grew by 2 per cent, said the report.

—IANS

na/