Auto Volumes – February 2022

February 2, 2022
Sector View
PV, CV space continues to outshine… Neutral

Auto wholesale dispatches for January 2022 came in a mixed bag, Volume performance for January 2022
registering healthy MoM growth in passenger vehicle (PV) and commercial
- OEMs report mixed wholesale dispatches for
vehicles (CV) space amid improving macroeconomics and easing supply

Monthly Report
January 2022 with PV & CV space witnessing MoM
side issues. Muted demand prospects weighed on the 2-W and 3-W space.
recovery in volumes while high base continues to
Tractor growth continues to be hampered by a higher base.
impact the performance in the tractor space. The 2-
In the 2-W pack, market leader Hero MotoCorp reported a volume decline of W segment witnessed muted dispatches with Eicher
3.6% MoM at 3.8 lakh units. Bajaj Auto reported volumes of 3.2 lakh units, Motors underperforming its peers with volumes
up 1.5% MoM while TVS Motors posted 8% volume growth MoM at 2.5 lakh down high double digit MoM
units. Royal Enfield brand at Eicher Motors reported a decline of 20% MoM
at 58,838 units. Scooters space outpace motorcycle segment for the month. - Vahan registrations for January 2022 totalled 14.43
lakh units, down 8% MoM and averaged at ~82% of
In the PV space, market leader Maruti Suzuki (MSIL) lagged peers and
pre-Covid levels
reported flattish performance MoM at 1.5 lakh units with adverse product
mix (decline in share of UV’s in the sales mix). M&M's volumes increased
- With government’s thrust on infrastructure, private
12.7% to 19,964 units while Tata Motors' growth was at 15.5% to 40,942
capex cycle revival on anvil and need for personal
units (EV sales up 28% MoM to 2,892 units).
mobility, we expect PV and CV space in particular to
In the CV segment, market leader Tata Motors (TML) reported volumes of witness healthy pick in sales volume, going forward
35,268 units, up 3.3% MoM. Ashok Leyland posted 11.4% increase to 13,939
Key players’ volume performance – Jan 2022
units while M&M posted 32.5% growth MoM at 21,111 units. VECV volumes
declined 11.7% to 5,434 units. Recent announcements in Union Budget
HMCL -3.6
2022-23 i.e. robust allocation of | 7.5 lakh crore (up 35% YoY) as capex for

ICICI Securities – Retail Equity Research

FY23E & extension of commissioning date by one year to avail concessional
tax rate (~15%) for new manufacturing set-ups is expected to further spur BAL 0.3
commercial vehicle sales, going forward. The 3-W industry sales volume
plummeted again with Bajaj Auto posting fall of 8.4% MoM.
Maruti 0.8
In the tractor space, M&M's tractor sales declined 34.8% YoY to 22,682 units,
with Escorts declined was at 36.7% to 5,707 units (note – tractor volumes
TML 9.5
are compared YoY due to seasonality impact on MoM basis).

Exhibit 1: Snapshot of OEM performance during January 2022

Jan-22 Jan-21 % chg Dec-21 % chg FY22TD FY21TD % chg M&M (auto) 19.5
2-W
Hero 3,80,476 4,85,889 (21.7) 3,94,773 (3.6) 41,35,742 47,09,114 (12.2)
ALL 11.4
Bajaj 3,23,430 3,84,936 (16.0) 3,18,769 1.5 33,01,195 29,43,197 12.2
TVS 2,54,139 2,94,596 (13.7) 2,35,392 8.0 25,77,160 23,36,249 10.3
MoM
Eicher 58,838 68,887 (14.6) 73,739 (20.2) 4,75,431 4,76,343 (0.2)
PV
Source: Company, ICICI Direct Research
Maruti Suzuki 1,50,842 1,57,150 (4.0) 1,50,134 0.5 12,91,846 11,02,859 17.1
Tata Motors 40,942 27,050 51.4 35,461 15.5 2,89,528 1,65,405 75.0
M&M 19,964 20,634 (3.2) 17,722 12.7 1,70,629 1,25,125 36.4
CV
Ashok Leyland 13,939 13,126 6.2 12,518 11.4 93,546 69,781 34.1
M&HCV 8,663 7,374 17.5 7,619 13.7 50,532 32,904 53.6
LCV 5,276 5,752 (8.3) 4,899 7.7 43,014 36,877 16.6
Tata Motors 35,268 32,816 7.5 34,151 3.3 2,72,370 1,88,105 44.8
M&M 21,111 13,388 57.7 15,938 32.5 1,16,601 1,29,841 (10.2) Research Analysts
M&HCV 598 551 8.5 584 2.4 4,919 2,897 69.8 Shashank Kanodia, CFA
LCV 20,513 12,837 59.8 15,354 33.6 1,11,682 1,26,944 (12.0) shashank.kanodia@icicisecurities.com
Maruti Suzuki (LCV) 3,537 3,602 (1.8) 3,015 17.3 26,356 23,519 12.1
VECV 5,434 5,673 (4.2) 6,154 (11.7) 42,418 28,771 47.4
Raghvendra Goyal
3-W
raghvendra.goyal@icicisecurities.com
Bajaj 40,013 40,263 (0.6) 43,701 (8.4) 3,94,030 2,85,252 38.1
Atul Auto 1,727 1,629 6.0 1,683 2.6 13,226 12,931 2.3
TVS Motors 12,649 12,553 0.8 15,541 (18.6) 1,42,750 95,184 50.0
M&M 2,868 2,841 1.0 2,480 15.6 22,224 13,707 62.1
Tractors
M&M 22,682 34,778 (34.8) 18,269 24.2 3,04,498 2,95,382 3.1
Escorts 5,707 9,021 (36.7) 4,695 21.6 78,040 83,174 (6.2)
Source: Company, ICICI Direct Research
 Monthly Report | Auto Volumes ICICI Direct Research

Story in Charts
Exhibit 2: Maruti Suzuki
Segment Jan-22 Jan-21 %chg Dec-21 %chg FY22TD FY21TD %chg
Vans 10,528 11,680 (9.9) 9,165 14.9 89,934 81,643 10.2
Mini & Compact 90,106 1,02,088 (11.7) 85,665 5.2 7,21,352 7,34,476 (1.8)
Maruti Suzuki auto volumes for January 2022 came
Ciaz 1,666 1,347 23.7 1,204 38.4 12,123 10,714 13.2
in at 1.5 lakh units, flattish MoM. Mini & Compact
Total Passengers 1,02,300 1,15,115 (11.1) 96,034 6.5 8,23,409 8,26,833 (0.4)
segment witnessed a 5.2% MoM growth to 90,106
UV 26,624 23,887 11.5 26,982 (1.3) 2,40,340 1,76,043 36.5
units while UV segment reported a decline of 1.3%
Total Domestic 1,28,924 1,39,002 (7.3) 1,23,016 4.8 10,63,749 10,02,876 6.1 MoM to 26,624 units. Export volumes declined
Sales to other OEM 3,981 5,703 (30.2) 4,838 (17.7) 40,238 26,927 49.4 19.5% MoM to 17,937 units and was the key miss
LCV 3,537 3,602 (1.8) 3,015 17.3 26,356 23,519 12.1 for the month
Exports 17,937 12,445 44.1 22,280 (19.5) 1,87,859 73,056 157.1
Total Sales 1,54,379 1,60,752 (4.0) 1,53,149 0.8 13,18,202 11,26,378 17.0
Source: Company, ICICI Direct Research

Exhibit 3: Hero MotoCorp (HMCL)

Jan-22 Jan-21 % chg Dec-21 % chg FY22TD FY21TD % chg HMCL’s total volumes for the month were at 3.8 lakh
Motorcycles 3,57,845 4,49,037 (20.3) 3,76,862 (5.0) 38,63,590 43,45,126 (11.1) units, down 3.6% MoM with motorcycle segment
Scooters 22,631 36,852 (38.6) 17,911 26.4 2,72,152 3,63,988 (25.2) witnessing a decline of 5% on MoM basis while
Total Sales 3,80,476 4,85,889 (21.7) 3,94,773 (3.6) 41,35,742 47,09,114 (12.2) scooter segment reporting volume growth of 26.4%
Exports as % of total 5.7 3.7 5.1 5.8 2.9 on MoM basis (low base)
Source: Company, ICICI Direct Research

Exhibit 4: Bajaj Auto (BAL)

Segment Jan-22 Jan-21 %chg Dec-21 %chg FY22TD FY21TD %chg
For Bajaj Auto, total volumes for January 2022 were
2-W 3,23,430 3,84,936 (16.0) 3,18,769 1.5 33,01,195 29,43,197 12.2
flattish MoM to 3.6 lakh units (domestic up 2.5%,
3-W 40,013 40,263 (0.6) 43,701 (8.4) 3,94,030 2,85,252 38.1
exports down 1.2%). The only silver lining was 6.2%
Total Sales 3,63,443 4,25,199 (14.5) 3,62,470 0.3 36,95,225 32,28,449 14.5
QoQ growth in domestic 2-W sales volume at 1.35
Domestic 1,49,656 1,70,757 (12.4) 1,45,979 2.5 15,62,308 15,55,305 0.5
lakh units
Exports 2,13,787 2,54,442 (16.0) 2,16,491 (1.2) 21,32,917 16,73,144 27.5
Source: Company, ICICI Direct Research

Exhibit 5: Eicher Motors (Royal Enfield)

Segment Jan-22 Jan-21 %chg Dec-21 %chg FY22TD FY21TD %chg Eicher Motors reported disappointing volume prints
Upto 350 cc 49,586 64,248 (22.8) 62,543 (20.7) 4,01,085 4,35,031 (7.8) for January 2022. Total RE sales volume for the
> 350 cc 9,252 4,639 99.4 11,196 (17.4) 74,346 41,312 80.0 month came in at 58,838 units, down 20.2% MoM
Total 58,838 68,887 (14.6) 73,739 (20.2) 4,75,431 4,76,343 (0.2)
Source: Company, ICICI Direct Research

Exhibit 6: TVS Motor

Segment Jan-22 Jan-21 %chg Dec-21 %chg FY22TD FY21TD %chg
Motorcycles 1,37,360 1,36,790 0.4 1,33,700 2.7 14,27,414 10,39,446 37.3 TVS Motors’ 2-W sales were up by 8% MoM to 2.54
Scooters 80,580 98,319 (18.0) 67,553 19.3 7,41,215 7,60,668 (2.6) lakh units with increase more prominent in the
Mopeds 36,199 59,487 (39.1) 34,139 6.0 4,08,531 5,36,135 (23.8) scooter segment at ~19% MoM. The 3-W sales
Total 2-W Sales 2,54,139 2,94,596 (13.7) 2,35,392 8.0 25,77,160 23,36,249 10.3 however were down 18.6% MoM primarily driven by
exports. Total domestic sales volume was up 14.5%
3-Wheelers 12,649 12,553 0.8 15,541 (18.6) 1,42,750 95,184 50.0
MoM
Total Sales 2,66,788 3,07,149 (13.1) 2,50,933 6.3 27,19,910 24,31,433 11.9
Exports 97,858 1,00,926 (3.0) 1,03,420 (5.4) 10,35,893 6,58,158 57.4
Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 2

 Monthly Report | Auto Volumes ICICI Direct Research

Exhibit 7: Ashok Leyland

Segment Jan-22 Jan-21 %chg Dec-21 %chg FY22TD FY21TD %chg Ashok Leyland reports healthy sales volume for
M&HCV Passenger 1,001 820 22.1 1,020 (1.9) 5,624 3,676 53.0 January 2022. Total sales volume increased 11.4%
M&HCV Goods 7,662 6,554 16.9 6,599 16.1 44,908 29,228 53.6 MoM to 13,939 units. It was primarily led by
M&HCV Total 8,663 7,374 17.5 7,619 13.7 50,532 32,904 53.6 increase in M&HCV truck volumes which were up
LCV 5,276 5,752 (8.3) 4,899 7.7 43,014 36,877 16.6
16.1% MoM & LCV, which was up 7.7% MoM
Total Sales 13,939 13,126 6.2 12,518 11.4 93,546 69,781 34.1
Exports 1,230 767 60.4 1,025 20.0 8,071 5,602 44.1
Source: Company, ICICI Direct Research

Exhibit 8: Tata Motors

Tata Motors reported healthy volumes for January
Segment Jan-22 Jan-21 % chg Dec-21 % chg FY22TD FY21TD % chg
2022. Total sales volume came in at 76,210 units, up
Total CV 35,268 32,816 7.5 34,151 3.3 2,72,370 1,88,105 44.8
9.5% MoM with CV sales up 3.3% (at 35,268 units)
Total PV 40,942 27,050 51.4 35,461 15.5 2,89,528 1,65,405 75.0
while PV sales were up by 15.5% MoM (at 40,942
Total sales 76,210 59,866 27.3 69,612 9.5 5,61,898 3,53,510 58.9
units). PV EV sales inched higher at 2,892 units for
Total domestic 72,485 57,649 25.7 66,307 9.3 5,31,961 3,39,340 56.8
Jan’22, up 28% MoM (2,255 units- December 2021)
Total exports 3,725 2,217 68.0 3,305 12.7 29,937 14,170 111.3
Source: Company, ICICI Direct Research

Exhibit 9: Mahindra & Mahindra

Segment Jan-22 Jan-21 %chg Dec-21 %chg FY22TD FY21TD %chg
Uvs 19,848 20,498 (3.2) 17,469 13.6 1,68,751 1,23,507 36.6
Cars and Vans 116 136 (14.7) 253 (54.2) 1,878 1,618 16.1
4-Wheeler pickups 20,513 12,837 59.8 15,354 33.6 1,11,682 1,26,944 (12.0) Mahindra & Mahindra reported healthy volume
M & HCV 598 551 8.5 584 2.4 4,919 2,897 69.8 prints. Automotive segment volumes were up 19.5%
Total 4-W 41,075 34,022 20.7 33,660 22.0 2,66,668 2,54,966 4.6 MoM to 46,804 units. Sequentially uptick ~33.6%
3-W 2,868 2,841 1.0 2,480 15.6 22,224 13,707 62.1 at 20,513 units in the LCV segment was the key
Total domestic Auto 43,943 36,863 19.2 36,140 21.6 2,86,024 2,68,673 6.5 silver lining. While M&HCV reported flattish
Exports 2,861 2,286 25.2 3,017 (5.2) 26,532 14,428 83.9 performance. On the tractors front, decline was
Total Auto Sales 46,804 39,149 19.6 39,157 19.5 3,09,695 2,83,101 9.4 sharp at 34.8% YoY due to higher base
Tractors - Domestic 21,162 33,562 (36.9) 16,687 26.8 2,90,030 2,86,846 1.1
- Exports 1,520 1,216 25.0 1,582 (3.9) 14,468 8,536 69.5
Total Tractors 22,682 34,778 (34.8) 18,269 24.2 2,81,816 2,95,382 (4.6)
Source: Company, ICICI Direct Research

Exhibit 10: Escorts

Escorts reported muted sales volume for the month
Segment Jan-22 Jan-21 %chg Dec-21 %chg FY22TD FY21TD %chg
primarily tracking high base. Total tractor sales
Tractors - domestic 5,103 8,510 (40.0) 4,080 25.1 71,874 79,428 (9.5)
volume stood at 5,707 units down 36.7% YoY. On
Tractors - exports 604 511 18.2 615 (1.8) 6,166 3,746 64.6
Total tractors 5,707 9,021 (36.7) 4,695 21.6 78,040 83,174 (6.2) the construction equipment space, the volume
Construction equipment 375 475 (21.1) 377 (0.5) 3,206 2,784 15.2 remained flattish MoM at 375 units
Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 3

 Monthly Report | Auto Volumes ICICI Direct Research

RATING RATIONALE
ICICI Direct endeavours to provide objective opinions and recommendations. ICICI Direct assigns ratings to its
stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,
Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined
as the analysts' valuation for a stock
Buy: >15%
Hold: -5% to 15%;
Reduce: -15% to -5%;
Sell: <-15%

Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com

ICICI Direct Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com

ICICI Securities | Retail Research 4

 Monthly Report | Auto Volumes ICICI Direct Research

ANALYST CERTIFICATION
I/We, Shashank Kanodia, CFA, MBA (Capital Markets), & Raghvendra Goyal, CA, Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views
about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. It is also confirmed that above mentioned Analysts of
this report have not received any compensation from the companies mentioned in the report in the preceding twelve months and do not serve as an officer, director or employee of the companies mentioned in the report.

Terms & conditions and other disclosures:

ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products.
ICICI Securities is Sebi registered stock broker, merchant banker, investment adviser, portfolio manager and Research Analyst. ICICI Securities is registered with Insurance Regulatory Development Authority of India Limited (IRDAI) as a composite
corporate agent and with PFRDA as a Point of Presence. ICICI Securities Limited Research Analyst SEBI Registration Number – INH000000990. ICICI Securities Limited SEBI Registration is INZ000183631 for stock broker. ICICI Securities is a subsidiary
of ICICI Bank which is India’s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details
in respect of which are available on www.icicibank.com.

ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant
percentage of companies covered by our Investment Research Department. ICICI Securities and its analysts, persons reporting to analysts and their relatives are generally prohibited from maintaining a financial interest in the securities or derivatives
of any companies that the analysts cover.

Recommendation in reports based on technical and derivative analysis centre on studying charts of a stock's price movement, outstanding positions, trading volume etc. as opposed to focusing on a company's fundamentals and, as such, may not
match with the recommendation in fundamental reports. Investors may visit icicidirect.com to view the Fundamental and Technical Research Reports.

Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein.

ICICI Securities Limited has two independent equity research groups: Institutional Research and Retail Research. This report has been prepared by the Retail Research. The views and opinions expressed in this document may or may not match or may
be contrary with the views, estimates, rating, and target price of the Institutional Research.

The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may
not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information
herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate
that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to
this company, or in certain other circumstances.

This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for
informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers
may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment
or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on
investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not
necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections.
Forward-looking statements are not predictions and may be subject to change without notice.

ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months.

ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public
offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction.

ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its associates or its analysts did not receive any compensation or other benefits from the
companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this
report.

Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.

ICICI Securities or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research
report.

Since associates of ICICI Securities and ICICI Securities as a entity are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies
mentioned in this report.

ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.

Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report.

We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary
to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of
investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

ICICI Securities | Retail Research 5