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Mint
15 hours ago
- Automotive
- Mint
Maruti Suzuki to Escorts Kubota: Which auto stocks to buy after May sales data? Here are top four picks for long-term
Indian automakers' May 2025 sales data, released on Monday, 2 June 2025, portrayed a mixed sentiment among stock market experts and brokerage firms. The passenger vehicle (PV) segment's low growth and the booming export figures fueled the market outlook for auto stocks. Indian automobile manufacturing companies reported weak sales to dealers in May 2025 due to muted urban demand, mainly in the small car segment. India's largest automaker, Maruti Suzuki, reported a 5.6% fall in domestic sales to 135,962 units in May 2025. The brand's small car segment witnessed a 31% fall, for cars like the Alto and the S-Presso. Hyundai Motor India reported an 11% fall in its May 2025 wholesale sales data, as the brand sold 43,861 units compared to 49,151 units in the same period a year ago. Tata Motors reported an 11% YoY drop in sales to 41,557 units. When it comes to two-wheelers, market leader Hero MotoCorp posted a 2% YoY rise in sales for May 2025, while the second-largest firm, Bajaj Auto, recorded 1.6% growth. TVS Motor reported a 14.1% year-on-year (YoY) jump in total sales to 309,287 units, due to strong demand for its electric vehicle offering. Indian brokerage firm Anand Rathi maintained a 'Neutral' expectation for India's auto sector stocks, citing the May 2025 sales performance. The tractor sales for May 2025 were in line with the brokerage estimates, and growth was mid-single digits due to support from unseasonal rainfall, an MSP hike, and healthy agricultural activities. The two-wheeler sales were in line with the brokerage estimates. However, the passenger vehicle (PV) sales were 'slightly below estimates' due to a sluggish retail market trend. 'Ahead, rural markets, the monsoon, rabi output, cash-flow, better interest rates and higher disposable incomes thanks to tax cuts would maintain momentum,' said the auto sector analysts at Anand Rathi in a sector review report on Monday. Rajesh Sinha, Senior Research Analyst at Bonanza, also recommended three stocks to buy for the long term: Mahindra & Mahindra, TVS Motor, and Maruti Suzuki. The analysts at Anand Rathi recommended buying Maruti Suzuki and Escorts Kubota. 1. Mahindra & Mahindra Ltd (M&M): Mahindra & Mahindra shares have given stock market investors more than 500% returns in the last five years, and over 18% in the last one-year period. Rajesh Sinha recommended this stock, citing M&M's position to excel in its core business operations, underpinned by a strong rural recovery and the introduction of new SUV and tractor models. The expert also said that the company's export business witnessed a 37% year-on-year (YoY) growth, as the automaker now positions itself to launch three Internal Combustion Engine (ICE) SUVs, two Battery Electric Vehicles (BEV), and five Light Commercial Vehicles (LCVs) in CY26. 2. TVS Motor Ltd (TVSMOTOR): The shares of the two-wheeler automaker have given stock market investors more than 600% returns in the last five years and nearly 25% in the last one-year period. The stock market expert highlighted the company's sharp rise in electric two-wheeler sales and the board's expectations of export growth due to high demand from the Latin American market and demand recovery in Sri Lanka and Africa. The management also expects a strong revival in rural demand in the near term, fueled by the upcoming May-June wedding season in India. 3. Maruti Suzuki India Ltd (MARUTI): Maruti Suzuki shares have given Indian stock market investors more than 110% returns in the last five years. However, the shares are down 2.52% in the last one-year period. Sinha highlighted how the automaker's total sales volume (Domestic + Exports) for the month rose to 1.8 lakh units. The company's exports also saw an 80% YoY jump as it achieved its production milestone for the 2024-25 fiscal year. Anand Rathi also recommended buying Maruti Suzuki shares after the May 2025 auto sales data release on Monday, 2 June 2025. 4. Escorts Kubota Ltd (ESCORTS): Escorts Kubota shares have given back investors over 230% in the last five years. However, the tractor manufacturer's stock lost 16.91% in the last one-year period. Like the other Indian automakers, Escorts Kubota's export segment witnessed a 71% rise, even though the domestic volumes took a 2% hit. The core business revenue volumes from tractor sales witnessed a 1% YoY rise to 10,354 units, in line with Anand Rathi's estimates for the month. The brokerage recommended this stock as its stock pick after the May 2025 sales data release for stock market investors. Sinha also highlighted how China's rare-earth magnet export curbs pose a 'significant risk' to the Indian auto industry. He said that automakers are urging the government to expedite diplomatic negotiations and clearances with China while considering other suppliers from nations like Japan and Vietnam. The current restrictions pose a high threat to the production of ICE and EV vehicles in India. 'Urgent investment in domestic processing and R&D into alternative motor technologies is essential for long-term resilience,' he added. Read all stories by Anubhav Mukherjee Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
Mint
a day ago
- Automotive
- Mint
Mint Primer: Why India's small car is vanishing, and how to save it
Once the key driver of India's auto boom, sales of entry-level cars are sputtering. In fact, India's largest car maker, Maruti Suzuki, has sought government help to revive sales in the budget segment. Can such incentives reverse the trend? And does Japan hold any lessons? Also read: Stuck in first gear: Take a close look at what ails car sales in India What does entry-level car sales data show? According to the Society of Indian Automobile Manufacturers (Siam), domestic sales in the mini segment (cars up to 3.6-metres in length) fell from 460,772 in FY19 to 152,262 in FY24 and 133,397 in FY25, a staggering 71% drop in the last six years. India's largest carmaker Maruti Suzuki, also the segment's dominant player, saw a drop in sales of its Alto and S-Presso to 6,776 units in May 2025 from 9,902 units a year back. Small cars accounted for 46% of FY19's passenger vehicle sales and declined to 27.7% in financial year 2024. Maruti Suzuki has now sought the government help to arrest the decline. What can revive small car sales? Government intervention is crucial to reviving small car sales. Incentives and tax benefits for first-time buyers—who want to switch from two- to four-wheelers—could improve affordability. Buyers pay third-party insurance for three years upfront at the time of purchase. While this may be okay for buyers of bigger cars, it pinches first-time and budget buyers. Automakers must innovate to offer competitive pricing and increase sales volumes while ensuring regulatory compliance, experts said. If the industry fails to address these challenges, small cars may gradually disappear from India's roads. Also read: Hybrids vs EVs: New advisory for Delhi fleet operators adds fresh fuel to fire Are there any immediate triggers to boost sales? The industry hopes that this fiscal will see a demand uptick for entry-level cars. It is banking on the budget proposal that made income up to ₹12 lakh per year (effective 1 April) tax-free to boost spending, as people have more money. Besides, the central bank cut interest rates by 25 bps in February and April and the trend remains downwards. This will reduce loan EMIs. What options do entry level car buyers have? They can opt for used cars. The ex-showroom price in New Delhi of a new Maruti Alto K10, for instance, increased from ₹3.4 lakh in 2019 to ₹4.23 lakh in 2025, a 25% jump. Used cars would allow buyers to own larger and more feature-rich cars at prices comparable to new subcompact models. For instance, in Delhi, on used car sites, a Maruti Baleno 2016 model was listed for ₹3.55 lakh and a 2021 Renault Triber at ₹4.45 lakh. Without government intervention, small cars may soon lose their foothold for first-time buyers entirely. Also read: Maruti Suzuki shares edge higher after THIS capex expansion update. Do you own? What can India learn from Japan? To help buyers upgrade from two-wheelers to cars, the government can look at how other countries are going about this. For instance, in Japan, the smallest car segment, known as the Kei, helped buyers upgrade to cars. Japanese buyers pay lower tax and insurance on them compared with bigger cars, leading to lower ownership costs. The affordability of Kei cars means that today they comprise a third of all cars sold in Japan. Small and big cars should be treated differently to address the affordability challenge, experts say.
Mint
3 days ago
- Automotive
- Mint
May auto sales: PVs flat, CVs steady, 2-wheelers accelerate
Indian wholesale auto volumes exhibited a mixed trend in May, with the passenger vehicle (PV) segment reporting low single-digit year-on-year (YoY) growth, driven primarily by exports, while domestic demand stayed muted. In contrast, two-wheeler (2W) domestic demand remained healthy, with exports recording strong double-digit growth. Tractors saw high single-digit YoY growth, whereas commercial vehicle (CV) volumes remained largely flat. Three of India's top four passenger vehicle manufacturers reported weak sales to dealers in May, reflecting a subdued urban demand, particularly in the small car segment. Maruti Suzuki, the country's largest carmaker, reported a 5.6% YoY decline in domestic sales, with 135,962 units sold in May 2025. Sales of its mini-segment cars, including the Alto and S-Presso, fell sharply by 31% YoY. Entry-level cars priced under ₹ 5 lakh — which once accounted for over a million units in FY16 — fell drastically to just 25,402 units in FY25. These now make up less than 30% of the company's portfolio. To spur small car sales in the country, Maruti Suzuki India on Monday called for incentives. Hyundai Motor India, the second-largest player, posted an even steeper decline of 11%, selling 43,861 units compared to 49,151 units in May 2024. Tata Motors also reported an 11% YoY drop in domestic PV sales to 41,557 units. However, Mahindra & Mahindra bucked the trend, benefiting from strong utility vehicle demand, with a 21% YoY increase in UV sales to 52,431 units. Overall, total passenger vehicle OEM volumes grew approximately 2% YoY. In the 2W segment, domestic volumes grew by 6% YoY, while exports remained strong with double-digit growth. Royal Enfield saw sustained demand for its premium motorcycles, dispatching 75,820 units to dealers in May — a 19.3% YoY rise. TVS Motor reported a 14.1% YoY increase in total sales to 309,287 units, driven by strong demand for its electric two-wheeler (E2W) segment, with iQube volumes surging 50% to 27,976 units in May. Hero MotoCorp and Bajaj Auto also posted modest YoY growth of 2% and 1.6%, respectively. In the commercial vehicle (CV) segment, volumes remained largely steady. Tractor volumes grew by approximately 5% YoY. Looking ahead, domestic brokerage firm JM Financial expects domestic PV wholesales to remain weak in the near term. It does not anticipate any meaningful improvement in passenger vehicle demand until the festive season. In the two-wheeler segment, while retail financing in the entry-level category remains a concern, the ongoing marriage season (May and June) is expected to provide short-term support to demand. For the CV segment, the brokerage expects volumes to witness a gradual recovery, driven by higher government capex and an uptick in infrastructure activity. Mahindra & Mahindra expects the early arrival of an above-normal southwest monsoon to support kharif sowing. Additionally, the recent hike in MSP for paddy and other kharif crops, along with better reservoir levels and supportive government schemes, is expected to aid near-term growth in tractor demand. Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
Hindustan Times
3 days ago
- Automotive
- Hindustan Times
Maruti Suzuki seeks govt support to rescue ailing small car segment. Know more
Maruti Suzuki is pitching for government intervention to revive the small car segment in the Indian passenger vehicle market. Notify me Small cars or hatchbacks have been the backbone of the Indian passenger vehicle market for a long time. In recent times, the small car segment has been witnessing immense pressure from the rising demand and sales of utility vehicles, especially SUVs and crossovers. This has pushed the small car segment down drastically. Maruti Suzuki, being the biggest car manufacturer in India, has always had a large pool of small cars. Even now, Maruti Suzuki holds the biggest chunk of the small car segment with its models like Alto K10, S-Presso, Celerio, WagonR, Ignis, etc. The small car segment, which had once dominated the Indian passenger vehicle market, has recorded a gradual decline with the affordability factor coming into play and currently accounts for less than 30 per cent at present. PTI has reported that entry-level cars priced below ₹ 5 lakh, which used to be around a million units (934,538 units) in FY16, have declined to just 25,402 units in FY25. In the hatchback segment, consumer preferences are changing in favour of premium hatchbacks, which sit at the top end of the segment. In such a situation, Maruti Suzuki is seeking the government's support to rescue the small car segment. Also Read : Upcoming cars in India Maruti Suzuki saw sales of models like Alto K10 and S-Presso decline to 6,776 units in May 2025 as against 9,902 units sold in the same month last year. Even the sales of compact cars, including Baleno, Celerio, Dzire, Ignis, Swift, and WagonR, dropped to 61,502 units last month as compared to 68,206 units in May 2024. This has propelled the OEM to pitch for government help to revive the segment. In fact, earlier as well, Maruti Suzuki has advocated for revival in this segment to boost overall passenger vehicle sales in the country. The share of small cars in the overall PV market in India was 47.4 per cent in FY18 and 46 per cent in FY19. In FY20, it improved marginally to 46.5 per cent and has been on a decline since. In FY21, it was 45.6 per cent, 37.5 per cent in FY22, 34.4 per cent in FY23 and 27.7 per cent in FY24. Maruti Suzuki India Senior Executive Officer (Marketing & Sales) Partho Banerjee told reporters in a virtual press conference that with enhanced regulation, prices of small car models have increased significantly, impacting the buyers who want to upgrade from two-wheelers to entry-level cars. "So somewhere the government has to understand that if they want to fuel the growth of the auto industry, they need to understand where the problem is and how to increase the size of the pie (small car sales)," he noted, while adding, 'Some incentives are required so that the customer who is not able to afford the car can come in and can migrate to a four-wheeler from a two-wheeler." Check out Upcoming Cars in India 2024, Best SUVs in India. First Published Date: 03 Jun 2025, 09:57 AM IST
Time of India
3 days ago
- Automotive
- Time of India
May 2025 auto dispatches: PVs remain tepid, two-wheelers hold steady
New Delhi: Automobile dispatches to dealers in May 2025, the second month of the current financial year, painted a mixed picture. While passenger vehicles faced challenges due to inventory buildup and sluggish retail demand, two-wheeler sales continued their recovery, driven by strong rural demand and better access to financing. Passenger Vehicles In the PV segment, industry estimates indicate that dispatches stood at approximately 3.51 lakh units in May 2025, reflecting marginal growth over 3.49 lakh units dispatched in the same month last year. This demand continues to be largely driven by SUVs. Country's top carmaker, Maruti Suzuki , reported a 6 per cent year-on-year decline in domestic dispatches, attributing the drop to its decision to 'calibrate supplies to dealers' amid challenging market conditions. The company stated that it currently maintains an average inventory level of 35 days across the country. Partho Banerjee , Senior Executive Officer – Marketing & Sales at Maruti Suzuki, acknowledged that 'the market is slowing, despite the new models available.' While its rural demand remains strong, urban demand is struggling. 'Fundamentally, entry-level vehicles are facing challenges, and even SUVs, except for new models, are witnessing a decline. Overall, the sentiment in the urban market is far from positive,' he said. Maruti's mini cars, including the Alto and S-Presso, are facing the heat, with dispatches falling to 6,776 units from 9,902 units in the same month last year. Compact cars, including the Baleno, Celerio, Dzire, Ignis, Swift, and WagonR, also saw a drop, with dispatches declining to 61,502 units from 68,206 units YoY. The company's Ciaz model, whose production was halted last month, recorded wholesales of just 458 units in May, down from 730 units in May 2024. Banerjee expressed optimism for retail sales in the coming month, noting that while many customers have already secured financing, vehicle deliveries have been delayed due to the impact of the India-Pakistan conflict in a few states. Jammu & Kashmir, Punjab, Rajasthan, and Gujarat, states particularly affected by the situation, collectively account for nearly 22% of the company's sales. However, expectations of a good monsoon are likely to provide additional support to demand in the weeks ahead. For Hyundai, which reported a decline of around 11 per cent in May, the availability of several key models was impacted. Tarun Garg, Chief Operating Officer at Hyundai Motor India, attributed the drop to a routine week-long biannual maintenance shutdown at the company's Chennai manufacturing facility. 'SUV demand remains the bright spot, especially for players like Mahindra, but overall momentum may stay muted until festive season tailwinds kick in,' Nikhil Dhaka, Vice President, Primus Partners told ETAuto. Dhaka added that soft retail sales and emerging concerns over component supply, particularly due to rare earth magnet disruptions, are prompting cautious dispatch strategies from OEMs. It is noteworthy that both companies are realigning their production focus towards exports amid challenges in the domestic market. Rahul Bharti , Senior Executive Officer, Corporate Affairs at Maruti Suzuki India, said, 'The strategy of de-risking is paying off well, particularly during these slightly difficult times.' Domestic Sales May 2025 May 2024% changeMaruti Suzuki1,35,9621,44,002-6Mahindra & Mahindra52,43143,21821Hyundai43,86149,151-11Tata Motors41,55746,697-11Toyota Kirloskar29,28025,27316Kia 22,31519,50014JSW MG Motor 6,3044,51040 Earlier, the Federation of Automobile Dealers Associations (FADA) had predicted that passenger vehicle retail sales would remain steady but muted in May, as buyers awaited new model launches and grappled with elevated financing costs. On the production front, Gaurav Vangaal, Associate Director – LVP Forecasting at S&P Global Mobility said India's PV market continues to grow steadily despite a high base, with no major challenges on the horizon except rare earth metal sourcing. He noted that while recent regional disruptions due to a war-like situation affected a few states, overall market sentiment remained stable during May. With a favourable monsoon forecast ahead, Vangaal remains optimistic, highlighting rural India's continued role in sustaining PV growth. Two-Wheelers Driven by seasonal wedding demand, sustained rural momentum and post harvest demand, two-wheeler sales continued to remain stable, reflecting steady buyer sentiment across key markets. Among segment players, Honda Motorcycle & Scooter India (HMSI) reported a YoY decline in sales, even as all other major two-wheeler manufacturers registered positive growth. Domestic Sales May 2025 May 2024% changeHero MotoCorp4,88,997 479,450 2HMSI4,17,2564,50,589-7TVS 3,09,287 2,71,14014Bajaj Auto1,91,4121,88,3402Suzuki Motorcycles1,07,78092,03217Royal Enfield75,82063,53119 Hero MotoCorp's consistent performance and Bajaj Auto's export-led growth highlight the resilience of the two-wheeler segment, supported by seasonal demand, tax reliefs, and rate cuts that improved buyer sentiment in semi-urban markets, Dhaka said. Looking ahead, he expects the segment to maintain its growth trajectory, especially with strong rural income prospects and a gradual EV shift. 'Macroeconomic stability will remain the key enabler in the months ahead,' he added. Rare Earth Magnets Challenge The industry is also staring at a potential production hit as China has put curbs on export of rare earth magnets, which are used across multiple sectors, including automobiles. China accounts for an estimated 70-80 per cent of processing and over 90 per cent of rare earth magnet production. This heavy dependence has left Indian automakers vulnerable to supply chain disruptions amid ongoing geopolitical and logistical challenges. A recent ET report suggests that a joint delegation from the Society of Indian Automobile Manufacturers (SIAM) and the Automotive Component Manufacturers Association (ACMA) is set to visit China to address growing concerns over delays in the import of rare earth magnets. While Rahul Bharti of Maruti Suzuki noted that China's export curbs have not had an immediate impact on production, he confirmed that China has requested an end-user certificate, which must be endorsed by the Indian government and approved by Chinese authorities. He added that the process is currently underway, with the industry in active discussions with the government. Experts suggest that the supply disruption of rare earth magnets is likely to have a greater impact on the electric two-wheeler segment production or even price hikes in the long term, a segment which is more exposed and sensitive to such constraints. During a media interaction on Monday, TVS Motor acknowledged that the effects of the export ban are expected to start reflecting in production by June or July. Last week, Bajaj Auto flagged serious production risks that could arise as early as next month if the supply issue remains unresolved.
