This is why NIFTY Auto index is falling | What to expect next? | Fall in auto share prices

The NIFTY Auto index started this week on the lower note, down over 1.2% as shares of most auto companies, including, Maruti Suzuki, Tata Motors, Eicher Motors, and M&M, declined 2-3% on 3rd October.

This fall comes after automakers posted mixed monthly auto sales numbers for September. Want to know how auto sales numbers fared? and what lies ahead for the Indian auto industry. Let's take a deep dive.

Two-wheeler makers sees mixed-bag sales

Leading two-wheeler makers reported mixed sales during September. Bajaj Auto reported a 9% fall year-on-year in domestic sales to 2 lakh units, mainly due to the high base of last year. In the same month last year, the company had raised dispatches to build up dealer inventory after a severe shortage of semiconductors.

Meanwhile, Eicher Motors’ total motorcycle sales fell 4% to 78,580 units, mainly due to lower dispatches of models with engine capacity up to 350cc. Of late, the Royal Enfield maker has faced a fresh wave of competition with the entry of international players like Harley Davidson and Triumph.

Hero MotoCorp surprisingly registered a more than 3% rise in September sales, with domestic sales at 5.1 lakh units. As per company’s management, India’s 2-wheeler demand to be on healthy trajectory during the festive season, led by macro-economic factors

High SUV demand drives passenger vehicle sales

In the passenger vehicle segment, demand for sports-utility vehicles (SUVs) continues to be in the fastlane, buoyed by festive season demand.

Maruti Suzuki’s domestic sales rose by 1.6% to 1.5 lakh vehicles driven by higher utility vehicle sales. Meanwhile, the sales in the mini and compact segment fell 22.5%, indicating changing consumer preference and move towards utility vehicles.

Other than this, Thar and Scorpio car maker, Mahindra & Mahindra reported highest sales for third consecutive month, with growth of 20% year-on-year to 41,267 units. Meanwhile, domestic sales of Tata Motors dropped marginally by 6% to 44,809 units due to the high base. However, its electric vehicle business continues to be in high gear, with sales rising 57% on an yearly basis to 6,050 units.

Commercial vehicle sales surprise

Commercial vehicle sales were the bright spot for the auto industry as Tata Motors and Ashok Leyland reported 12% and 10% respective rise in monthly sales.

New BS6 phase II product launches, robust replacement demand, continued government infrastructure push aided higher commercial vehicles sales. Besides sustained demand from the logistics and e-commerce sector continue to benefit the sector. Ashok Leyland shares closed in green, up 0.3% compared to over 0.5% fall in benchmark NIFTY50 index.

Uneven monsoon impacts tractor sales

Domestic tractor sales for Escorts Kubota declined by over 11% year-on-year to 10,114 units as uneven monsoon across regions hit demand. Also, the postponement of the main festive season to the third quarter impacted sales.

So this was a brief overview of monthly sales numbers for leading automakers. Will Auto stocks rise again in key festive season months of October and November? Do let us know in the comments.

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