ICICIdirect believes that February saw a good volume pick-up following positive sentiments created by product launches in this year's auto expo and also from excise duty cuts announced by the government. Auto Expo 2014 witnessed nearly 70 launches/concept unveilings, compared to the earlier edition where about 47 vehicles were showcased and launched.
''For February, the overall auto industry grew 5.3% YoY to 1.8 million units. The two-wheeler segment has grown 9% YoY to 1.4 million units, with growth primarily driven by the scooter segment, which saw 28% YoY growth to ~320,000 units. The overall motorcycle segment also grew 5.5% YoY to clock 1 million units. This was led by strong growth of HMSI (40% YoY increase) even as market leader HMCL saw flattish volumes and BAL de-grew 13% in the domestic market while growing 4% in the export market,'' it said.
''With the excise cuts providing the much needed impetus, March volumes will give a clear indication of the demand improvement, as the duty cuts were passed on by OEMs only in the second half of the month. On a longer term basis, we remain positive on the growth prospects of the industry with a rise in incomes augmenting auto penetration levels in the country. However, we do not expect any meaningful recovery in volumes till H2FY15, as the demand scenario still appears weak,'' said ICICIdirect.
''On the basis of index performance, for February, the BSE Auto index (8.9%) has outperformed the BSE Sensex (up 2.9%). Among our I-direct auto coverage, we remain bullish on frontline OEM stocks like Tata Motors and Bajaj Auto,'' it added.
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