Auto sales to continue driving in the fast lane in September

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26 Aug, 2025 12:21

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These days when the global economy is shrouded in uncertainty and global equity markets are bleeding, the Indian auto sector offers a silver lining as it continues to witness robust demand across segments. Experts expect almost all major automobile players to report healthy growth on both year on year (YoY) as well as month on month (MoM) basis. The auto industry will be declaring September sales numbers over this weekend.

Unlike in the past few months when the 2W segment was a laggard, it has now seemed to have shifted gears and the players in this segment are likely to post mid-high single-digit growth on both monthly and yearly basis.

From a YoY growth perspective, Royal Enfield is expected to lead the pack by a large margin as experts see triple-digit growth in its volumes during the month of September as compared to the same period last year. On a MoM basis though, its growth is likely to remain in mid-single digits.

Hero Moto Corp, on the other hand, is expected to clock double-digit growth MoM which is likely to be the highest in the segment and is aided by recovery in rural as well as export demand.

TVS Motor is also expected to report strong volumes for the month of September led by successful new launches, and increasing e-scooter sales.

However, exports for Bajaj Auto are seen declining and the company is expected to report low single-digit growth MoM as well as YoY.

“We expect the 2W segment to lead growth due to improvement in the supply chain, low system inventory, and recovery in rural demand which is beneficial for the economy segment of 2W,” said Kripashankar Maurya, assistant vice president of Choice Equities. The entry and executive motorcycle segment had been sluggish lately.

With a predominantly normal monsoon, sentiments in rural economy are seen turning around for good and an uptick in demand is starting to be seen. “Driven by positive rural sentiments, new launches and attractive sales schemes ahead of the festive season, we expect 2W volumes to recover,” said a report from Sharekhan by BNP Paribas.

The strong demand momentum for passenger vehicles is expected to continue moving forward. This is driven by pent-up demand, increasing penetration of electric vehicles (EVs) and exciting new launches in the segment.

Gradual easing of chips shortage will augur well for PV sales and help clear the order backlog. “Channel checks with dealers suggest a strong order book in the PV segment and retail sales, enquiries and customer footfall have improved significantly over the past few months,” said the note from Sharekhan by BNP Paribas.

Maruti Suzuki, Tata Motors and M&M are expected to witness MoM volume growth of 4-5 percent while growth compared to the same period last year is expected to be close to triple digits for both Maruti and M&M. Tata Motors is expected to report MoM growth of 40 percent.

This segment is expected to continue to see stable demand aided by government’s infrastructure push, increase in construction activities and movement of goods. The upcycle in the CV sector is expected to continue for the next 3-5 years, driven by increasing economic activities, improving sentiments of fleet owners, and lower cost of ownership under BS-VI vehicles.

Analysts at Sharekhan by BNP Paribas expect Tata Motors to dispatch 33,300 units (up 5.7 percent MoM), Ashok Leyland 14,850 units (up 5.2 percent MoM), and Eicher Motors 6,250 units (up 3 percent MoM) in September 2022.

Light commercial vehicles are expected to do well because of the surge in e-commerce and better last-mile connectivity. Buses are expected to see some recovery aided by opening of schools and offices.

Improving rural sentiments have likely boosted tractor sales with both M&M and Escorts expected to witness strong growth on a sequential basis.

Demand momentum in the sector is likely to continue in the second half of this fiscal which largely will be driven by robust performance in PV and CV segment while experts expect the 2W and tractor to lose some steam sometime later in the second half.

“Typically, second half (H2) is stronger for auto companies as compared to the first half (H1) as the third quarter typically has the festive season and th fourth quarter is the last quarter of the fiscal,” said Karan Kokane, analyst (automobiles and auto ancillaries), Ambit Institutional Equities.

CV players typically see the most difference in H2 vs H1 volumes, primarily due to the monsoon affecting construction sales in H1, Kokane added.

However, Maurya of Choice Equities expects the 2W sales (except the premium segment) to moderate after the festive season amid rising interest rates and dip in export demand.