Volumes for the commercial vehicle industry are witnessing a gradual recovery month-over-month, aided by healthy freight availability and freight rates.

In the passenger vehicle segment, despite a good demand, the sale is expected to fall on the back of chip shortages where volumes are expected to be significantly affected and inventory levels have fallen too.

Brokerage firm Nomura estimates the overall PV sales to decline 32% on a YoY basis. Although channel checks suggest that supply constraints are gradually improving and dealers are expecting strong festive demand starting Oct 7.

Whereas, demand for 2W continues to be a laggard and inventory levels are at ~7 weeks. Nomura estimates 2W sales to decline 29% YoY. However, electric 2W retails continue to see good traction.

Commercial vehicle segment continuous to see a healthy recovery where MHCV segment sales are expected to rise 87% YoY as per Nomura, owing to a low base.

Fleet operators’ profitability has been driving higher retails and the segment is also seen to be a beneficiary of the increase in construction activity, especially in the residential housing segment.

While tractor demand remains largely stable for September month and companies are hopeful of good sales in times ahead. Tractor company Escorts is expecting good sales with the onset of the festive period and improved monsoon rainfall can boost the sentiment further.

Companies like Escorts and M&M in the tractor division are expected to see a sales increase of more than 70% on a month-on-month basis. 

Overall if we see then export demand has been much stronger and companies with high exposure to overseas markets are expected to perform well. Auto sales data due on 1st Oct.