Nomura Financial Advisory and Securities believes that overall passenger vehicle industry volumes picked up quite strongly in November - industry volumes were up 10% y-y as compared to our estimate of 6% growth. ''SAAR has improved and now indicates 9% volume growth in FY15F. Uptick in MHCV industry volumes continued in Nov-14 with all three large OEMs (TTMT, AL and Eicher) reporting strong volume growth,'' it said.

''Overall, industry volumes were up 43% vs our expectation of 39% growth. In 2-wheelers, industry volumes were up 7% y-y - HMCL and HMSI reported stronger-than-expected volumes but Bajaj Auto reported 20% y-y decline in domestic bike volumes. In our view, demand in rural areas appears to be somewhat weak, which has impacted tractor industry as well as M&M's UV volumes last month,'' said Nomura.

''Overall, we remain upbeat on strong volume growth recovery across industry segments over the next 2 years and reiterate our positive stance on 4-wheeler OEMs - Maruti Suzuki (MSIL IN, Buy), Tata Motors (TTMT IN, Buy), Atul Auto (AL IN, Buy) and M&M (MM IN, Buy). Within 2-wheelers, we prefer Hero (HMCL IN, Buy) over Bajaj (BJAUT IN, Neutral),'' it opined.

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