HSBC said India’s auto retail sector ended the festive period on a strong footing, with passenger vehicle (PV) sales rising around 15% year-on-year and two-wheeler sales up 18% year-on-year. The brokerage noted that footfall and booking momentum remained healthy through the festive weeks, and crucially, strong retail activity helped keep inventory at manageable levels for OEMs — a positive signal ahead of the crucial December quarter close.
According to HSBC, stable inventory positions imply that December could also be a strong month for the auto sector, extending the momentum beyond the festive-led spike. The brokerage also highlighted that its proprietary commodity indices for two-wheelers and four-wheelers have risen roughly 10% and 5% sequentially in Q3, which could influence margin trajectories depending on how pricing discipline evolves across OEM segments.
The firm added that the overall demand environment remains constructive, supported by improving urban consumption, replacement demand and increasing availability of credit at competitive rates.
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