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Table of Contents
Domestic - Short term demand
Domestic - Long term demand
Exports - Short term demand
Exports - Long term demand
Domestic auto-component production to grow at 11-13% in fiscal 2018 supported by healthy demand from OEM and exports
In fiscal 2018, OEM off-take has grown at 13-15% --
Total sales of two-wheeler has accelerated by 15-17% due to healthy rural sentiments and new model launches.
Total sales of commercial vehicles have grown by 9-11%, demand increased because of stricter implementation of the ban on overloading and push by financiers and OEMs. Demand from freight-generating sectors, such asinfrastructure, container traffic, auto carriers, and cement is expected to drive volumes in the MHCV segment.
Passenger vehicle total sales have accelerated 5-7% due to dip in exports on account of GST refund issue and capacity constraints faced by major passenger vehicle OEMs despite healthy domestic sales in fiscal 2018.
Realisation will grow on account of sale of high-value BS IV components and passing on of raw material price increase. Basic raw material index have increased by 7% in fiscal 2018.
We expect the organised aftermarket to benefit from the goods and services tax and increasing presence of large fleet operators
Exports is estimated to have grown by 9-11% in fiscal 2018 mainly on account of improving global economic scenario. Inmajor export destinaltions, such as USA, auto sales mainly class 8 trucks have grown by greater than 70% in 2017.Another major economy, Europe has also also shown signs of revival. Auto component exports to other emergingeconomies such as South East Asia and Latin America have also shown substantial growth.Imports is also estimated to have grown at a higher pace of 9-11% despite anti dumping duties and localisation efforts bythe players. Higher imports of components pertaining to safety (due to various mandatory regulations), body parts, etc. ledto this growth
Auto-component production to grow at 12-14% in fiscal 2019 supported by better growth in the domestic market and healthy growth in exports
In fiscal 2019, OEM off-take has grown at 14-16% --
Passenger vehicle segments will see growth of 8-10% in fiscal 2019. Growth in passenger vehicles (PV) will be aided by new model launches, stable interest rates, and higher disposable income.
In fiscal 2019, we expect the two-wheeler industry to grow 9-11%, assuming normal monsoons and improved rural demand, state pay commission pay-outs, and pick-up in infrastructure activities. Anti-lock braking system (ABS) andcombined brake system (CBS) norms will be mandatory for newly launched vehicles from fiscal 2019. CBS will be compulsory for all vehicles below 125 cc and ABS for all vehicles above 125 cc. We do not envisage any impact infiscal 2019, as customers can opt for cheaper models
The tractors segment is expected to grow 10-12% in fiscal 2019 over a high base, considering a normal monsoon. Growth will be largely driven by government support.
Commercial vehicle (CV) segment is projected to expand 11-13% in fiscal 2019. Growth in MHCV will be seen on account of government's focus on infrastructure and expected pick-up in coal mining. LCV is expected to grow onback of improvement in replacement demand and private consumption. Bus demand is likely to grow robustly at a robust pace, aided by revival in most end-use sectors, over the low base of fiscal 2018.
Basic raw material index is expected to climb up slightly, by 1-3%, in fiscal 2019