Sector Performance: Automobiles - Two-wheelers to outperform

AUTOMOBILES Sector Performance

• The two-wheeler segment continues to outperform the four-wheeler segment in terms of volume growth.
• Among the two-wheelers, Bajaj Auto leads the sector with a 29.1% growth for Q4FY2006 and a 25% growth for FY2006. The growth has picked up strongly in Q4FY2006 after a subdued Q3FY2006.
• The four-wheeler segment, mainly the passenger vehicle segment, has been growing selectively. The growth in the volume of the segment leader, M-800, has been declining of late and is expected to be lower for the quarter, thereby putting a damper on the segment's growth. However, the decline in the sales of Maruti Udyog's M-800 model is expected to be offset by the pick-up in the offtake of Alto and Swift. The increased proportion of these higher-end models is expected to result in higher realisations and margins.

• The margins will be maintained during the quarter for both the segments, as the high prices of non-ferrous metals will be set off by the lower steel prices.
• The commercial vehicle segment has managed to maintain a double-digit growth rate on a high base of last year and this growth rate is expected to be maintained for the rest of the year.