Passenger vehicle sales remain subdued despite strong local demand

Industry estimates 294,872 units were sold in the passenger vehicle segment last month – a decline of 3% over 303,398 units sold in the year-ago period.

Automakers in India mostly report wholesale dispatches from factories to dealers and not retail sales to customers.

Industry volumes were dragged down by market leaders Maruti Suzuki and Hyundai Motor India where sales fell 7% (to 128,924 units) and 15% (to 44,022units), respectively. “The shortage of electronic components had a minor impact on the production of vehicles which are primarily sold in domestic market. The company took all possible measures to minimise the impact”, Maruti Suzuki said in a statement.

Korean rival Hyundai too is closely monitoring the ongoing semiconductor supply constraint situation. The company said it will make all efforts to meet customer demand.

ET Bureau

While chip availability has improved the past few months the situation is expected to take some more time to normalise, said senior industry officials.

Meanwhile, homegrown auto major Tata Motors recorded its highest-ever sales in the passenger vehicle segment at 40,777 units in January.

Kia India too managed to grow volumes marginally during the month under consideration. The company sold 19,319 units last month, as against 19,056 units sold in the year-ago period. Hardeep Brar, VP and Head of Sales & Marketing, Kia India said, “We are kick-starting the new year with positive sales growth and a new product on offering for our discerning Indian customers…We are excited by the market reaction, as all of our offerings have been consistently performing well on a month-on-month basis.”

Kia India anticipates that the supply chain constraint will remain in place until early 2022, but with careful planning and market estimation, production would remain stable in relation to current market trends. The company expects the semiconductor situation to show signs of recovery beginning in the second quarter.

At Mahindra & Mahindra (M&M) sales declined 3% to 19,964 units. Honda Cars India reported a drop of 8% to sell 10,427 units in Jan.

Yuichi Murata, director (marketing and sales), Honda Cars India said, “The sales in the month of January’22 got partially impacted owing to the weekend-lockdowns in some cities but overall the situation looks positive and steady. All of our production output have been getting dispatched to our dealer partners in time, meeting the demand for the Honda models. The market situation will improve with the reduction in the COVID-caseload as we move forward.”

Sales of two-wheelers, especially at the entry-level, continued to remain under pressure on back of an increase in acquisition cost and economic impact of the second wave of the pandemic in rural areas. At TVS Motor Company, two-wheeler sales dropped 22% to 167,795 units last month. Pune-based Bajaj Auto sold 135,496 units, which is a decline of 14% over 157,404 units recorded in January 2021.

In the commercial vehicle segment, market leader Tata Motors saw sales inch up 3% to 31,708 units in January.

Tractor sales declined last month, albeit on a high base. At Mahindra tractor sales fell 37% to 21,162 units in January. Hemant Sikka, president (farm equipment sector), M&M, is optimistic of volumes going up in coming months.

Sikka said, “On the back of good rainfall and high moisture content in the soil, Rabi sowing has been very good, and this bodes very well for a bumper crop harvest. Continued Government focus on agriculture, rural infrastructure and higher cash flows with rabi harvest, will lead to positive sentiments and increase in tractor demand.”