Auto companies are set to report a tough month of sales. February readings are expected to be subdued, especially as the common man has stayed away from showrooms, adding to the overall subdued auto sales data picture, which shows wholesale data – i.e. sales from automakers to their distributors.
Over the past couple of months, one has seen year-end discounts in December with continuation in January as well. In February, weak retail sentiment and that’s reflective in sales estimates by analysts as well. Hero and Tata Motors are expected to report the weakest numbers for February, while M&M, Eicher Motors and TVS are expected to have the highest growth compared to the same period last year.
Two Wheelers: Eicher & TVS Continue Growth Momentum
This month the overarching trend for 2-wheelers has been that rural markets continue to outperform urban areas, driven by improved agricultural sentiments and seasonal marriage demand. However, that seems to have not benefitted sales of players like Hero MotoCorp.
Another factor within the 2-wheelers space is that scooters are seeing better demand relative to motorcycles, and this is reflective of the higher sales growth of TVS Motors compared to Bajaj Auto.
TVS has improved its export sales significantly and has been consistently been clocking roughly 1 Lakh sales in export market. TVS New Jupiter 110 has a 2-week waiting while the TVS Ronin has been doing well according to Motilal Oswal. But the Bajaj Chetak is doing better than TVS iQube in select markets given its metal body.
For Eicher Motors, the change in strategy post its quarter 2 earning to focus more on sales rather than absolute EBITDA margins has been reaping strong dividends. While this strategy did impact margins in Q3 and the stock did react negatively upto 7%, the company is the fastest growing two wheeler maker in listed space.
Passenger Vehicles: M&M Expected To Outperform Again
The weakest trend in terms of sales has been in the passenger vehicle space. Apart from M&M, which has been in a league of its own, most car makers are expected to flat to negative sales growth this month. Another interesting aspect has been that despite demand weakness, most carmakers have raised prices by about 1% in February. Similar to two wheelers, footfalls continue to rise in rural regions, while urban demand remains stagnant, according to Motilal Oswal.
Maruti Suzuki and Hyundai Motor India are expected to report low single digit growth while momentum will continue with Mahindra, expected to report growth in the mid-teens.
For Tata Motors, the sales has fallen by 3% in first 10 months of FY25 and February won't be any different. While the new launches at the Bharat Mobility Auto Show of the Sierra did garner attention, it’s a test for its recent launches like the Curvv going into FY26.
Commercial Vehicles: Selective Financing Impact Sales
After some momentum in January, February sales have again taken the slow lane when it comes to commercial vehicle sales. Legacy truck makers Ashok Leyland and Tata Motors have both had negative growth in first 10 months for sales in FY25. Demand remains weak, with industry retails likely to decline 6-8% when compared to the same period last year, according to multiple brokerages.
The CV segment has seen small players struggling and financiers remaining cautious and opting for selective financing. Both these factors are weighing on the overall demand, according to Nuvama.
Channel partners are not dismayed, however. They believe the decline is not as severe as in previous downcycles with agri-related demand expected to pick up in March.
Only Eicher Motors' commercial vehicle arm, VECV is expected to report a high single digit growth. VECV has shown sales growth of roughly 4-5% for first 10 months between April 2024 to January 2025, the highest among listed peers.
Tractors: Rabi Season To Keep Demand Steady
Tractor demand has been relatively better than commercial vehicles and with M&M’s commentary of roughly 15% growth in the ongoing quarter, momentum is expected to be the strongest this fiscal. A near 10% growth is expected this month for M&M.
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