Passenger vehicle discounts expected to remain elevated in FY25

New Delhi: Passenger vehicle discounts are likely to remain elevated in FY25, global brokerage Nomura said.

Domestic PV industry wholesales were at 371K units in March-2024, while retails are likely to be lower at 360K, up 6 per cent y-y. We estimate industry inventory at 300-310K as of March-2024 end, Nomura said. PV discounts are likely to remain elevated, it added.

Maruti Suzuki's domestic sale volumes (excluding LCV and OE) were at 153K, up 15 per cent yy. “We estimate MSIL’s retail growth to be in low-single-digit with channel filling of 8-10K. We estimate MSIL’s wholesale market share at 41 per cent. With commodity and forex tailwinds and higher wholesales than retails, we estimate MSIL’s margins can see strong expansion in 4QFY24F (link),” Nomura said.

Tata Motors reported domestic PV sales of 50K units, up 14 per cent y-y. EV sales remained flat at 6.7K units down 3 per cent m-m despite the launch of Punch EV in the last month. Management also commented that it expects the demand for passenger cars to remain strong, although the high base effect may keep the growth rate in single-digit, Nomura said.

Motilal Oswal Financial Services said overall dispatches across auto segments in March were below estimates except for commercial vehicles. Passenger vehicles wholesales grew 9 per cent YoY led by sustained outperformance of UVs volumes.

“We are positive on the PV segment as it is expected to see better earnings growth, led by improved mix. While the 2W segment is expected to outperform other segments with high-single-digit volume growth, most of the growth seems already priced in the recent run-up of stocks. Also, we expect CV growth to moderate in the near term due to elections and then pick up in H2FY25,” the brokerage said.