‘May’21 auto sales to see double-digit decline’

Automobile sales volume for May1, impacted by the second wave of COVID-19 and lockdowns across States, are expected to see a double-digit decline across segments in comparison with May 2019, according a report.

Emkay Global Financial Services, in a report, said since volumes were not comparable year-on-year (YoY) on account of the low base last year, it had weighed them against May 2019 numbers.

“Tractors/passenger vehicles (PVs) should see a lower decline in comparison with 2Ws/commercial vehicles (CVs). We expect a swift recovery in volumes from Q2FY22 due to easing of lockdowns and pent-up demand,” Emkay said.

“Agricultural field activities have not witnessed any obstruction/ problems due to the second wave. However, despite being considered as an essential category, tractor volumes should be subdued on account of the severe impact of the pandemic in rural areas. Two-year CAGR for domestic volume is likely to be -21% for Escorts and -23% for M&M,” it added..

It said PV industry volumes would be in the slow lane despite healthy order book across most OEMs. Two wheeler industry volumes should be weak, it added.

CV industry volumes should be under pressure due to lower freight availability, resulting in the postponement of purchase orders by transporters, the brokerage said.

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