New Delhi: The last month of the financial year 2021-22 closed on a happy note, though not for all industry players. Aided by easing of supply chains, automobile wholesale in March reflected a positive month-on-month trend for the passenger vehicles. Demand remains good, but the problem is in the long waiting periods and delay in deliveries to the consumers.
Car production is expected to be affected for the rest of 2022 because of the semiconductor supply crunch. Experts suggest Russia-Ukraine war and other geopolitical tensions will fuel the crisis as both the countries are pivotal automotive input suppliers.
For the two-wheeler segment, the rural recovery is still remote and the market for commuter motorcycles is yet to recover from the second COVID wave. Added to this is the spiralling fuel price which was increased ten times in the past 12 days by a total of INR 7.20 a litre.
The exceptionally high commodity prices, which are at least partially, as the industry claims, is also transferred to the consumers. In the PV segment, Maruti Suzuki is likely to announce shortly a price hike, the fifth since January 2021. Others like Mahindra & Mahindra (M&M) and Tata Motors are expected to follow suit. Luxury carmakers like Audi and BMW have already done so.
In the two-wheeler segment, Hero MotoCorp has announced a hike of INR 2000 from April 1, followed by Suzuki motorcycles which has conveyed a rise of 1%-2% to its dealer partners.
Meanwhile, the commercial vehicle segment is showing a double digit recovery.
The following is a segment-wise report of the vehicle dispatches to dealers during march 2022.
Passenger Vehicles
While the top two automakers, Maruti Suzuki and Hyundai Motors, in the segment reported de-growth, others like Tata Motors, Toyota Kirloskar and Skoda Auto set a record and reported their highest ever monthly sales in March 2022.
Maruti Suzuki India Limited (MSIL)’s domestic sales dropped 8.4% on a year-on-year basis, however, its exports zoomed 128% to 26,496 units in March 2022 compared to 11,597 units in March 2021.
Its cars in the mini category clocked sales of 15,491 units in March this year, compared to 24,653 units in March last year. Cars in the compact category witnessed marginal growth with sales of 82,314 units in March 2022, as against 82,201 units in March 2021.
Sales of Maruti Suzuki utility vehicles declined to 25,001 units in March this year, as against 26,174 units in March 2021. Eeco van also saw a drop in sales to 9,221 units compared to 11,547 units in the same month last year.
Maruti Suzuki also shared that its domestic sales for the fiscal year ending March 2022 grew over the last two fiscal year, however, was down 28.6% when compared to FY 2018-19.
“As the supply situation of electronic components continues to be unpredictable, it might have some impact on the production volume in FY23 as well,” the carmaker said in a statement.
Interestingly, the volume gap between the second and the third largest carmaker has narrowed from about 20,000 units in March last year, to about 2,000 units in March this year.
Tata Motors, at number 3, has been gradually stepping up the ladder in the PV space. Being the market leader in the EV segment, its e-car sales grew to 3,357 units during March 2022 as against just 705 units in March 2021. its ICE vehicles too witnessed an uptick of 34% to 38,936 units in March this year compared to 28,949 units in March last year.
Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Ltd, and Tata Passenger Electric Mobility Ltd, said that the company ended the financial year with the highest-ever monthly sales of 42,293 units, a growth of 43% vs. March’21 and highest-ever SUV sales of 29,559 units.
“EV sales continued to witness a rapid growth in demand on the back of strong acceptance of Nexon EV and Tigor EV. Going forward, the semiconductor situation remains uncertain. We will continue to monitor the evolving situation closely and are refining our agile, multi-pronged approach to continue to fulfil customer orders,” he said.
Mahindra’s sales during March 2022 included 27,380 units of utility vehicles and 223 units of cars.
Veejay Nakra, Chief Executive Officer, Automotive Division, M&M Ltd, said, “Demand continues to be strong, even as we remain watchful of the global supply chain to take appropriate action, as required.”
For the South Korean automaker Kia, the Seltos SUV remained its best-seller with 8,415 units. Kia Carens picked up pace, registering 7,008-unit dispatches. Sonet and Carnival contributed 6,871 and 328 units respectively to the March 2022 tally.
Kia India also said that the company is well aware of the long waiting periods and hence it has commenced the production in three shifts at its Anantapur facility. “We are still in the recovery phase, as the semiconductor shortage remains a concern, which has affected our planned production. However, we assure our customers that we are vigilant of the trends globally and taking adequate measures to keep the waiting periods in check,” Hardeep Singh Brar, VP and Head of Sales & Marketing, Kia India, said.
Toyota Kirloskar dispatched a total of 17,131 units in the month of March 2022, making it the highest ever domestic sales in a month since July, 2017.
For MG Motor India, sales in March this year was “immensely impacted by the supply chain constraints due to the new COVID-19 variant and the ongoing global semiconductor chip shortage.”
Skoda Auto’s March 2022 sales was its highest-ever sales volume clocked in a month in its 2-decade-long history in India. The previous high for the company was 4,923 cars recorded in June 2012.
Two wheelers
The two-wheeler segment saw a dip in sales over the month of March last year. Country’s largest two-wheeler maker Hero MotoCorp dispatched a total of 4,25,721 units of motorcycles and 24,433 units of scooters during March 2022.
“With the pandemic restrictions witnessing a gradual withdrawal due to a steady decline in Covid-19 cases and reopening of all the sectors of the economy, we expect sales momentum to build up in FY23,” the company said.
Yadvinder Singh Guleria, Director, Sales & Marketing, Honda Motorcycle & Scooter India (HMSI) said that despite signs of moderation, the year FY22 continued to impact business momentum due to varied challenges arising from both demand & supply side. “However, bringing the synergies of new products along with new fun models’ business expansion has helped us catalyze consumer sentiment in both RedWing & BigWing businesses.”
For TVS, motorcycle sales grew to 160,522 units in March 2022 from 157,254 units in March 2021. Scooter sales of the company registered 94,747 units in March 2022 as against sales of 104,513 units in March 2021.
According to the company, the shortage in supply of semiconductors has impacted the production and sales of premium two-wheelers. “We are cautiously optimistic that the supply of semiconductors will improve in the coming months.”
Commercial vehicles
Country’s largest commercial vehicle maker, Tata Motors, reported a growth across the categories. Its domestic sales in March included 14,499 units of M&HCV, 7,555 units of I&LCV, 2,703 units of passenger carriers, and 19,668 units of SCV cargo and pickup.
Girish Wagh, Executive Director, Tata Motors Ltd, said, “Early signs of recovery were seen in the otherwise worst impacted CV passenger segment. We are cautiously optimistic about domestic MHCV & ILCV demand while keeping a close watch on geopolitical developments, fuel inflation and semiconductor shortage.”
Mahindra clocked a major portion of its domestic sales from LCVs of 2T- 3.5T segment at 15,202 units, followed by LCVs of less than 2T at 3,806 units, and LCVs of more than 2.5T and MHCVs together clocking 829 units during March 2022.
Its three wheeler sales (including e-3Ws) stood at 4,043 units in March this year, however down 9% when compared to 4,461 units in March last year.
Ashok Leyland’s big chunk of sales come from M&HCV category clocking 12,734 units in the domestic market, and 5,822 units in the LCV category.
Tractors
Hemant Sikka, President – Farm Equipment Sector, Mahindra & Mahindra Ltd, said, “Record procurement of Kharif acreage, substantial increase in exports of agricultural products like wheat, sugar and cotton will help improve the financial position of the farmers leading to better cash flow in the rural market to help boost tractor demand going forward.”
“Acreage of the kharif crop has already crossed last year’s levels, which augurs well for agri incomes. This will get a further boost with an early forecast of a normal monsoon. In the exports market, we have sold 1651 tractors, a growth of 43% over last year,” he said.
According to Escorts, the tractor industry wholesales continues to remain subdued in March 2022 due to high base of last year and subdued commercial demand.
“During next year, the tractor demand is expected to improve led by higher Rabi output, good level of water reservoirs, increased Union budget allocations to rural and agri sector coupled with favourable crop prices, and initial positive forecast of 2022 monsoon season as normal, all supporting rural customer sentiments. The rising inflation however continues to be an area of concern,” it said.
(This is a developing story, we will keep updating the numbers as OEMs release their sales data.)
