The commercial vehicle segment has been looking up. The stagnant demand for two wheelers is a major concern. Tractor sales are expected to gain momentum.
The following is a segment-wise report of the vehicle sales in February 2022.
Passenger vehicles
With the improvement in chip supplies, car production improved and wholesale dispatches also increased. However, the overall performance of this segment was impacted by the decline in the sales of market leaders Maruti Suzuki and Hyundai Motor compared to the sales in February 2021.
Aided by new launches, Tata Motors and Mahindra & Mahindra (M&M) reported growth in year-on-year sales.
Maruti Suzuki said it has recorded a decline of 7.4% in passenger vehicle domestic sales at 133,948 units in February 2022. The company sold 144,761 units in February 2021. Its total domestic sales (including passenger vehicles and light commercial vehicles) stood at 137,607 units in February this year, compared to 147,483 units in February 2021.
The shortage of electronic components had a minor impact on the production of vehicles sold in the domestic market. According to the company, it took all possible measures to minimize the impact.
Hyundai, which reported a drop of 15% in YoY sales, said that as the industry continues to grapple with the semiconductor shortage, it is exploring alternatives to ensure that customers can take delivery of their cars at the earliest.
About the company’s total sales, Veejay Nakra, Chief Executive Officer, Automotive Division, M&M Ltd, said, “All segments showed robust growth, including SUVs at 79%, which registered the highest ever monthly volume.”
He said the company expects strong demand to continue as the Covid situation eases further. It is closely monitoring the semiconductor related parts supply to take corrective action as appropriate.
Atul Sood, Associate Vice President (Sales and Strategic Marketing), Toyota Kirloskar Motor also said that the overall sentiment in the market remains positive. “This has also led to a consistent rise in order bookings, especially for the Innova Crysta as well as the Fortuner and as a next step, we are looking forward to catering to the pending orders on our side.”
Skoda Auto India, which recently launched the Slavia sedan and has been betting on the mid-size sedan segment, reported over five-fold surge in sales to 4,503 units last month. However, the carmaker said, “The sales in February 2022 were driven primarily by Kushaq SUV.”
Two-wheelers
Even though the two-wheeler wholesales have improved on a month-on-month basis, they remain in red against the corresponding month last year.
The top three two- wheeler makers reported a drop in domestic sales, owing to the subdued demand from the rural sector. Hero MotoCorp motorcycle sales declined by 27% to 3,38,454 units and scooter sales dipped by 52.5% to 19,800 units in February 2022.
Meanwhile, its largest competitor Honda Motorcycle & Scooter India (HMSI) saw a decline of about 1.25 lakh units in February 2022 as against the same month last year.
The Chennai-based TVS Motor Company said its motorcycle sales grew by 5% increasing from 137,259 units in February 2021 to 143,523 units in February 2022. Scooter sales of the company registered 86,616 units in February 2022 as against sales of 95,525 units in February 2021.
“The shortage in supply of semiconductors has impacted the production and sales of premium two-wheelers,” the company said.
The niche bike maker Royal Enfield, a unit of Eicher Motors, also said that the supply chain constraints due to the shortage of semiconductor chips continued to persist during the month and the company is working with its supplier ecosystem to resolve the same.
Commercial vehicles
Being a direct reflector of the state of economy, this segment is slowly coming into pace with the improvement in freight utilization and all the OEMs have reported their wholesales in green.
Being the segment leader, Tata Motors reported sales of 10,233 units of M&HCV, 5,599 units of I&LCV, 1,759 units of passenger carriers and 16,303 units of SCV cargo and pickups.
Tractors
The year-on-year tractor sales declined due to the high base of last year. However, the underlying demand drivers remain intact.
Hemant Sikka, President – Farm Equipment Sector, Mahindra & Mahindra Ltd. said, “Agri indicators continue to be promising with Rabi sowing at an all-time high and higher liquidity with farmers on account of timely and record procurement of Kharif crops. With record expansion in sown area for the third consecutive Rabi season, we are optimistic for an all-time high crop production level.”
“Additionally, the Governments focus on increasing the intensity of summer crops will bring in additional income in the hands of the farmers. In the exports market, we have sold 1527 tractors, a growth of 56% over last year,” he said.
According to Escorts, the tractor industry wholesales continued to remain subdued in February 2022, due to high base of last year, steep price increases due to higher inflation in commodity prices impacting retails and above normal inventory levels with the channel.
Going forward, the tractor maker expects overall higher rabi sowing this year, good level of water reservoirs, increased Union budget allocations to rural and farm sector and initial indicators of normal monsoon next year will drive positive momentum for tractor industry in coming year.
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“Tractor sales have declined the past few months because of high base and inflation. Long-term, though, there is a huge potential for growth in the tractor and farm equipment segment. Including replacement, the total equipment parc is currently 5 million units, as compared with the overall requirement of 16 million units”, it said.
