Passenger vehicle sales see muted growth, supply-demand mismatch may ring heavy for OEMs

The Indian passenger vehicle segment sales seem to have started on a positive note but the supply chain constraint may hamper its growth prospects.

Looking at the wholesales data for the nine automakers in the country, the overall sales came at 287,746 units, which was 195 percent higher albeit a low-year ago base, and just a percentage higher compared to the month of April. It may be noted that in 2021, the Covid-19 pandemic had resulted in muted growth across the industry.

The country’s largest carmaker Maruti Suzuki India reported sales of 124,474 units, which was 2 percent higher than the previous month. Thanks to its dominance and unabated competition in the entry-level segment, where most OEMs seem to have thrown their hats out of their ring.

While the company has been able to push the SUV sales envelope and is planning a product offensive there, in the mid-size segment, the Ciaz seems to have been losing out steam.

For Tata Motors’ the proverb ‘One man’s loss is another man’s gain’ seemed to be the mantra to surpass Hyundai Motor India to become the second-largest carmaker (in wholesales) for the second time in the last six months. A multitude of factors has helped the Indian OEM beat its Korean counterpart. For May, Tata Motors reported sales of 43,441 units, compared to 41,587 units in April.

The OEM reported its highest-ever monthly sales of 43,341 units (since inception – PV and EV domestic combined); highest monthly EV sales at 3,454 units; highest monthly sales for the Nexon SUV; and highest monthly sales for the Harrier and Safari.

Hyundai Motor India, reported sales of 42,293 units, up 69 percent YoY, albeit a low-year ago base, but 4 percent lower than the previous month’s wholesales of 44,011 units. The Korean carmaker said that its plants in Chennai observed the scheduled bi-annual maintenance shut down leading to no production for 6 days in the month (May 16-21), which “reduced the vehicle availability in the month affecting May sales numbers.”

Mahindra & Mahindra which is gearing up for the launch of the new Scorpio-N this month reported sales of 26,904 units, which was 19 percent higher compared to the previous month. Thanks to robust demand for its new range of products – Thar SUV, XUV700 – the OEM is looking to make the most of the demand season, only if it is able to manage the supply-chain disruption. It is interesting to note, that despite a waiting period lasting up to 24 months on select models, the company says it continues to receive healthy bookings, with only 10-12 percent cancellation.

Kia Motor India with its Seltos, Sonet, and Carnival SUV play seems to have successfully managed to make a distinct mark for itself in the domestic market. With sales of 26,904 units, the company reported a healthy growth of 19 percent over the previous month of April. Now, with the launch of Kia EV6 the Korean carmaker will explore a powerplay in the premium e-SUV space.

Toyota Kirloskar Motor reported sales of 10,216 units in the domestic market, which could be compared to its pre-pandemic performance level.

Atul Sood, associate VP – Sales, and Strategic Marketing, Toyota Kirloskar Motor said, “Demand continues to peak as we have very encouraging booking orders and enquiries for all our models. The new Glanza has received an overwhelming response from our customers as it is their trust and faith in the brand that helps us perform better. Segment-leading models like the Innova Crysta and the Fortuner continue to perform well and generate healthy booking orders. The Camry Hybrid and the Vellfire, continue to garner strong demand and our focus going forward would be to meet the immediate needs of our customers.”

With this the Japanese carmaker is also looking to expand its product offering with the introduction of the Urban Cruiser based on the Maruti Vitara Brezza, a new model co-developed with Suzuki Motor the Hyryder SUV, and the new generation of its most popular Innova SUV.

For Honda Cars India growth of 4 percent over April brought its wholesales to 8,188 units. The City sedan continues to remain a popular seller for the Japanese carmaker, but it has lost out on competition to its peers, especially without a strong contender in the SUV segment.

Also read: Tata Motors’ pips Hyundai to become second largest carmaker in India

Yuichi Murata, director, Marketing and Sales, Honda Cars India said, “The demand for Honda cars continued to stay strong as positive sentiments prevailed in the market but the prolonged supply chain-related issues still remain a hindrance and we are making all efforts to cater to the demand effectively. Our latest launch of a strong electric hybrid in the mainstream segment, the new City e:HEV has received an overwhelming response, far exceeding our initial plan, demonstrating that customers are showing a strong preference for such advanced technologies in the area of performance, environment-friendliness and safety.”

For Czech carmaker Skoda India, the wholesales came at 4,604 units, which was 11 percent lower than the month of April 2022. It seems to be struggling to meet the demand for its new launches the Slavia and Kushaq which looked to help propel in attaining growth in the Indian market. It is also important to note a lot many customers had taken to social media to express their displeasure with the Czech carmaker’s plan to replace the 10-inch infotainment console with the globally delivered 8-inch infotainment as a way to work around supply chain disruption.

MG Motor India doubled its wholesales on an MoM basis at 4,008 units, which it says demonstrates improvement in chip availability. It hopes that the situation will improve further in the subsequent months.

“Demand remains strong as MG maintains a healthy booking pace and experiences growth momentum although the production remains impacted due to the global Covid-19 lockdown. The brand is closely monitoring the situation caused by the global Covid lockdowns and is aligning its efforts to address the same,” said the carmaker in a statement.