Analysts cautious on road ahead for auto sector despite July sales recovery

For the auto sector as a whole, analysts now expect polarisation to get more entrenched where rural-focused plays like M&M, Escorts etc to do well

Sales of automobile companies recovered in July after a subdued couple of months as Covid-19 triggered a nation-wide lockdown. India’s largest carmaker, Maruti Suzuki for instance, said it had sold 108,000 units in July, 88.2 per cent more than June 2020, and 1.3 per cent more over July 2019. The automaker had reported zero sales in April due to the lockdown. 

In the two-wheeler category, the combined July wholesales of Hero MotoCorp, Honda, Royal Enfield (RE) and TVS fell 15% YoY, according to reports, but still are better than the 39% YoY fall in industry volumes in June 2020.