Two-wheeler, CV sales show strong start to FY25: Report

The automobile sector's performance in the first quarter of FY25 has shown a strong start for the two-wheeler (2W) and commercial vehicle (CV) segments. As per a report by brokerage firm Prabhudas Lilladher both commercial vehicle and two-wheeler sectors saw double-digit expansion with two-wheeler Original Equipment makers (OEMs) witnessing sales growth of approximately 26.6 per cent and commercial vehicle (OEMs) following suit with a growth of around 14.4 per cent.

According to the report, Passenger Vehicle (PV) volumes witnessed moderate growth, driven predominantly by Utility Vehicles (UVs), which compensated for the decline in compact vehicle sales. Additionally, Tractor volumes remained relatively stable, while three-wheeler volume saw an increase of approximately 1.2 per cent.

Reflecting on the previous fiscal year, FY24, the report notes 12.5 per cent growth in domestic wholesale volume, with notable surges in the three-wheeler and two-wheeler segments. The PV segment recorded consecutive years of record volume, with a preference observed towards utility vehicles, accounting for 59.7 per cent of the segment's contribution mix.

Export volumes, however, faced challenges, declining by 5.5 per cent annually due to geopolitical and monetary crises in key markets. Commercial vehicle and three-wheeler volumes witnessed sharp declines, while passenger vehicle segment exports saw marginal growth, primarily propelled by increased volume from Maruti Suzuki, Prabhudas Lilladher noted.

Key findings from the report highlight the continued dominance of utility vehicles in driving passenger vehicle industry growth, a trend of premiumisation in the two-wheeler segment, and a slowdown in CV demand attributed to various factors including high base and political events impacting buying sentiments.

Prabhudas Lilladher expressed confidence in the auto sector's prospects for FY25, forecasting a moderate pace of growth driven by pent-up demand and the high base effect. Projections indicate a 10-12 per cent growth in the two-wheeler segment and a moderate growth rate of 6-7 per cent in the PV segment. The report also anticipates continued outperformance in the UV segment due to new launches and expects a boost in tractor sales supported by forecasts of a normal monsoon.