Sector Update | 24 February 2025
Automobiles
At the SIAM Looking Ahead
Conclave, PV OEMs have
projected the domestic PV
volume to grow between
1-4% for FY26, with growth
likely to be driven by UVs.
Growth moderating for 2Ws and UVs
HMSI closes in on HMCL in domestic 2W ICE
In Jan’25, 2W ICE volume remained flat YoY, while PV volume grew 1.6% YoY.
In 2Ws, ICE scooter volume increased 8% YoY in Jan’25, whereas motorcycle
sales fell 3% YoY, declining for the third consecutive month. On YTD basis, the
motorcycle industry, excluding HMSI, has grown by just 2.6% YoY.
In domestic 2W ICE, the gap between HMCL and HMSI is just 100bp on YTD
basis (just 20bp in Jan’25).
In the motorcycle segment, growth in the 125cc segment decelerated to 7% in
Jan’25, while the 150-250cc segment fell 7% YoY.
HMSI has outperformed in motorcycles and increased its share by 330bp YoY
to 20.2% on YTD basis. In scooters, TVSL has been the biggest gainer, with
share gain of 150bp to 24.8%.
In PVs, growth in UVs has also been decelerating for the last few months, up
just 5.9% YoY in Jan’25. Key outperformers in FY25 so far are MM and Toyota,
which have gained market share by 140bp and 185bp, respectively, in UVs.
Our top picks in auto OEMs are MSIL, MM and Hyundai.
ICE 2Ws: HMSI gains share from HMCL and BJAUT, TVSL share is stable
The domestic 2W industry’s volumes remained largely flat YoY in Jan’25 and
have grown by 9.2% on YTD basis.
The motorcycle segment has grown 7% YoY on YTD basis and the ICE vertical has
increased by 14.3% YoY.
Among OEMs, HMSI has gained share from HMCL and BJAUT in 2W ICE, while
TVSL has managed to maintain its share on YTD basis.
Segmental trends:
Motorcycle segment:
Motorcycle industry declined 3% YoY in Jan’25, falling for the third consecutive
month.
HMSI and RE outperformed industry growth in Jan’25 (up 15%/14%).
As highlighted above, the domestic motorcycle industry has posted 7% YoY
growth on YTD basis.
Only HMSI has outperformed the industry with 28% YoY growth and has
increased its share by 330bp to 20.2%. Excluding HMSI, the industry has posted
just 2.6% YoY growth YTD.
On the other hand, BJAUT has seen the steepest decline in its market share by
165bp to 16.9% YTD. TVSL has lost 70bp share to 9.8%. HMCL has lost 40bp
share to 42.6%.
100cc segment:
The segment continued to underperform the industry, as Jan’25 volume
declined 10.6% YoY. Except HMCL, all players posted double-digit declines in
Jan’25 volumes.
Even on YTD basis, this segment has posted just 2.3% YoY growth.
Research analyst - Aniket Mhatre
(Aniket.Mhatre@MotilalOswal.com)
Research analyst - Amber Shukla
(Amber.Shukla@MotilalOswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.