Motilal Oswal Securities believes that the analysis of brand-wise domestic PV sales for May 2014 indicates initial signs of recovery with industry volume growth of 4.7% YoY, strongest in 18 months. MSIL's volumes grew 16.2% YoY (14.3% MoM), driven by improved consumer sentiments post the General Election.
''Retails were stronger at 95k units (v/s 90.4k units wholesale) as first time buyers are returning after several months. Correspondinlgy, its key entry-level car, Alto grew 5.5% YoY after 7 months of decline. Swift and Dzire also saw robust double digit growth,'' it said.
''Datsun GO (competing with MSIL's Alto) declined sharply on sequential basis. Hyundai's sales volumes grew 12.7% YoY, driven by recent launch of Xcent. Excluding, Xcent, Hyundai saw a volume decline of 11.5 % YoY. M&M reported 37.4% YoY growth in XUV5OO; only model to register YoY growth. Bolero and Scorpio saw declines. Sharp decline continues for Xylo, Quanto and Verito.''
''FY14, during which PV volumes declined 5%, marks the third consecutive year of muted demand. With improved economic outlook and consequent improvement in consumer sentiments, industry recovery could be sharp. MSIL's leadership position coupled with its strongest product pipeline ever makes it the best play on consumer sentiment recovery,'' it added.
