Indiastockguru Team
Mahindra & Mahindra continued with a winning streak reporting strong wholesale YoY volume growth in September 2024, unlike its close peers, Maruti Suzuki and Tata Motors. While shift of shradh period in September 2024 impacted wholesales, inventory calibration is another reason for lower wholesales. According to FADA press release in September, there were high inventory levels across passenger vehicle (PV) segment with stock days ranging between 70-75 days i.e. 7.8 lakh vehicles valued at Rs 77,800 crore. Thus, in the PV segment, high inventory levels, aggressive discounting practices and weak market sentiment continued to pressure dealer profitability. But is inventory calibration the only reason, or is the PV segment taking a breather after a strong three year growth period.
The consumer sentiment is muted in the PV segment and that is strongly visible in the Maruti Suzuki wholesale YoY volume growth over the past six months. Maruti Suzuki volumes are now more dependent on the UV/SUV segment than its core compact car segment. The UV/SUV segment which was nearly just one fourth of domestic volumes in FY19 is currently more than 40% in September 2024, surpassing compact car segment volumes. The UV/SUV segment wholesale volumes have fallen over the past six months, and so have the total volume growth for market leader, Maruti Suzuki.
But Maruti Suzuki, being the market leader, is always ready with a growth plan irrespective of muted consumer sentiment. And it is not CNG where the company is already miles ahead of its peers. The management has given guidance of 600,000 CNG car sales for FY25. The company is aiming to launch another 10 SUV models to be launched till 2030. While the SUV segment will have to be re-fueled to combat competitive intensity, the real game-changer will be unveiled in Bharat Mobility Auto Expo in January 2025. The company is going to showcase its first electric vehicle (EV). The company has a total six EV models lined up all the way to 2031.
