UBS :: India Auto Sector- Sept’11: pick up in PV sales, 2W robust

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UBS Investment Research
India Auto Sector
Sept’11: pick up in PV sales, 2W robust
 
„ PV: pick up momentum on back of upcoming festive season
Maruti domestic volumes declined 17% yoy (+2% mom) mainly due to disruption
of production at the Manesar plant. Dzire Sedan sales grew 10% yoy. Hyundai
domestic sales increased 13% yoy. Tata Motors reported increase of 10% yoy for
PVs with cars up 2% yoy (inc. Nano which declined 47% YoY) and UVs up 60%.
M&M UV sales grew 8% YoY (+28% mom) (Source: recent company
announcements).
„ 2W and tractors: robust growth
Hero Honda reported robust growth of 27% yoy (9% mom). TVS 2W domestic
sales also grew strongly (+16% yoy). TVS scooter volumes recorded 30% yoy,
moped sales were up 14% yoy and motorcycles grew 12%. Bajaj auto’s motorcycle
sales grew by 18% yoy, 3W grew 21%; of which exports grew strongly at 39%
while domestic sales were up 10%. According to Bajaj’s mgmt, premium segment
saw pressure owing to high interest and fuel costs. M&M domestic tractors
shipment grew 44% YoY; exports declined 1% YoY.
„ LCV continue to report strong growth, MHCV stable
Tata Motor’s LCV shipments grew strongly by 47% YoY, MHCV sales stable at
9% yoy. M&M LCVs (4W pickups) continued to report strong growth (+45%
YoY).
„ Preferred picks: M&M and Maruti
We continue to be positive on M&M as key beneficiary of strong growth in rural
economy and improving margin outlook. We like Maruti and believe all pressures
are priced in and volumes should recover strongly on a low base of FY12E in
FY13E.