New Delhi: With the support of new model launches in the market and improvement in semiconductor supplies, the passenger vehicle (PV) dispatches from the factories to the dealers posted a year-on-year growth in the month of June.
As per industry estimates, PV wholesales stood at 3.27 lakh units in June this year, growing about 2% against 3.21 lakh units in June last year. However, the industry witnessed about 2% decline on a sequential basis, when compared to 3.35 lakh units dispatched in May 2023.
In the first half of the year, the domestic PV segment has crossed the 20 lakh sales-mark, marking a 10% growth over 18.31 lakh units dispatched in the January-June period of 2022.
Going forward, most automakers are gearing up for product launches prior to the festive season. Maruti Suzuki which has just launched the Jimny and Fronx, will now introduce the Invicto MPV. Hyundai will launch its Exter, Kia will bring the new Seltos, and Honda to launch Elevate. The OEMs are expecting a steady demand moving ahead towards the festive season.
As per the ratings agency ICRA, there continue to be concerns regarding sustenance of the demand recovery for the two wheeler industry on account of the material rise in cost of ownership over the past few years.
Passenger Vehicles
The top three carmakers in the industry posted a single-digit growth in domestic sales during June 2023.
Maruti Suzuki’s volumes during the month was driven by the Utility Vehicles segment where it sells Brezza, Ertiga, Fronx, Grand Vitara, Jimny, S-Cross, XL6. It marked a two-fold increase to 43,404 units in June this year, as against 18,860 units in the corresponding month last year.
The mini car category (Alto, S-Presso) marginally dropped to 14,054 units, when compared with 14,442 units in June 2022. The sales of compact cars (Baleno, Celerio, Dzire, Ignis, Swift, Tour S, WagonR) also declined 17% to 64,471 units in June 2023, as against 77,746 units last year.
The carmaker, whose market share now stands at 42%, had also undergone a 10-day plant maintenance shutdown from June 9-19, resulting in no production.
Shashank Srivastava, Senior Executive Officer (Marketing and Sales), Maruti Suzuki said that the supply chain shortages are expected to improve further July onwards. However, the company is closely monitoring commodity prices, high interest rates and the chances of an erratic monsoon owing to the El Nino effect.
According to him, the industry retail PV sales volumes were in similar numbers to the wholesales during June. Describing the situation of the auto industry as the tale of two cities, he said discounts and incentives are being offered in the industry for certain models where stock levels are high, however some other models which are in popular demand have pending booking and waiting periods.
Going forward, Maruti Suzuki expects the growth of hatchbacks to remain flat during the current fiscal year and estimates the PV industry to cross the 40-lakh mark in FY24, even though the growth rate will be lower on a high base of last year.
Tarun Garg, COO, Hyundai Motor India said its Verna, Creta and Tucson have attained leadership positions in their respective segments in the first half of CY 2023.
Shailesh Chandra, Managing Director, Tata Motors PV and Tata Passenger Electric Mobility said that going forward, the company expects the demand to remain robust with the onset of the festive season in the second half of Q2 FY24. The supply side situation remains stable.
The maker Nexon recently announced that it will increase prices of its passenger vehicles (ICE and EVs), effective July 17, 2023, on an average of 0.6% across models and variants.
“The price increase is to offset the residual impact of the past input costs. Tata Motors will offer price protection to bookings made upto July 16, 2023 and deliveries upto July 31, 2023,” it said in a statement.
According to Veejay Nakra, President- Automotive Division, M&M, the growth trend continued with a strong demand for the SUV Portfolio. “The SUVs volumes were restricted by a short-term disruption in engine-related parts at the supplier end. The constraints on semiconductor related parts like Air Bag ECU continued during the month too.”
Atul Sood, Vice President- Sales and Strategic Marketing, Toyota Kirloskar Motor, said, “Ever since the launch of Urban Cruiser Hyryder and Innova Hycross, we are witnessing continued high acceptance by our customers. These along with a consistent performance by the entire product portfolio are enabling us to sustain the positive performance.” The company has also started three shifts in its operations.
Honda Cars which is set to launch its Elevate SUV, marked a 35% degrowth in June 2023. “Our sales in June are in line with our projections and met our planned targets,” Yuichi Murata, Director- Marketing and Sales, Honda Cars India said in a statement.
Rakesh Srivastava, Managing Director, Nissan Motor India counted the onset of normal monsoons, high single digit GDP growth and positive consumer sentiment as some of the positive factors going forward.
Two Wheelers
Hero MotoCorp, which largely caters to the rural segment, sold a total of 404,474 motorcycles and 32,519 scooters during the month.
Hero has increased the prices of its vehicles by around 1.5% effective from July 3. The exact quantum of increase will vary by specific models and markets. “The upward revision of the prices of motorcycles and scooters is part of the price review that the Company undertakes from time to time, keeping in mind various factors like price positioning, input costs and business imperatives,” it said.
“The onset of monsoon in most parts of the country and overall economic indicators bode well for a growth in demand, and industry volumes are expected to pick up leading into the upcoming festive season,” said the country’s largest two wheeler maker in a statement.
Rohan Kanwar Gupta, Vice President & Sector Head- Corporate Ratings, ICRA said that while the wholesale dispatches of two wheelers reflect a marginal growth on a YoY basis, they are estimated to represent a decline of about 8-9% on a sequential basis, with volumes in May 2023 remaining supported by the wedding season.
TVS sold 14,462 units ofiQube electric in June 2023 as against sales of 4,667 units in June 2022.
Premium two wheeler maker Royal Enfield registered its highest ever sales for the first quarter in FY24, beating its previous high of Q1FY19. B Govindarajan, CEO, Royal Enfield said, “Our recent products continue to perform well across India and International markets.”
“The onset of monsoon in most parts of the country and overall economic indicators bode well for a growth in demand, and industry volumes are expected to pick up leading into the upcoming festive season,” Motilal Oswal said in a report.
Commercial Vehicles
Girish Wagh, Executive Director, Tata Motors said, “M&HCV growth was driven by the strong infrastructure push by the Government, as well as increased activity in e-commerce, construction, and replacement demand in the auto logistics and petroleum sector.
“Looking ahead, the promising monsoon and continuing infrastructure thrust by the Government auger well for the CV industry, even as it faces the headwinds of high interest rates, fuel prices and inflation,” he said.
Tractors
Hemant Sikka, President – Farm Equipment Sector, Mahindra & Mahindra said, “Though arrival of SouthWest monsoon got delayed due to cyclonic disturbances, it has smartly progressed in the last week of June and has now covered the entire country, bringing huge relief to the farmers and aiding in Kharif sowing.”
“As on date, aggregate sowing acreage of Kharif crops is ahead of last year’s acreage and is progressing at a fast pace. In addition, record rabi crops, Government support with increase in MSP for all Kharif crops and improving terms of trade for farmers are positive factors that are expected to support tractor demand going forward. In the exports market, we have sold 1,114 tractors,” he said.
Overall sentiments were mixed as markets with good rainfall and crop prices showed good momentum, and markets with a delayed monsoon had a slightly dampened demand. Going forward, with a further advancement of monsoon across the country coupled with adequate reservoir levels, better liquidity and consumer credit availability, we expect the demand momentum to improve in coming months, Escorts Kubota said.
According to Motilal Oswal, overall sentiments were mixed as markets with good rainfall and crop prices showed good momentum, and markets with a delayed monsoon had a slightly dampened demand.
“Going forward, with a further advancement of monsoon across the country coupled with adequate reservoir levels, better liquidity and consumer credit availability, we expect the demand momentum to improve in coming months,” it said.
