New Delhi: There is a gap in the sales numbers of vehicles that the industry needs to fill to come closer to or even break the record of last fiscal year. Will it be able to accomplish this with the growing demand for vehicles despite having no major respite from the ongoing pandemic?
While the industry is pegged to post its highest comparative growth of the fiscal as sales in March 2020 was abysmal at 1,40,910 units after the nationwide lockdown and the uncertainty over the looming pandemic.
The carmakers in India have to sell 3,83,043 vehicles in March 2021 to reach last year’s sales of 27,73,575 units. This could be a mighty challenge because of the acute shortages of vehicles and limited availability of several popular models like Mahindra Thar, Hyundai Creta and Kia Sonet.
In order to break the record, March 2021 sales needs to be higher than the all-time high monthly sales of 3,33,984 vehicles in October 2020, and that too by a steep margin. If the industry can post sales of around 3.36 lakh units, it will be in the range of 27.24 lakh units. Only still higher numbers would take it closer to last year’s feat.
Table: 1 The fiscal numbers
| Subject | FY19 | FY20 | FY21 (Feb) | FY21 (Estimated) |
| PV sales | 33,77,463 | 27,73,575 | 23,90,532 | 27,24,000* |
*estimated March sales at 3.36 lakh
SIAM had given a projection of around 26.80 lakh units sales in the current fiscal given the uncertainty and a full month washout at the beginning of the fiscal. However the industry consistently clocked over 3 lakh units for the past two months, January (3,03,833) and February (308,804). Given the ongoing buoyant demand, March sales are expected to be much higher.
“We are expecting a good number that could be higher than the record sales of October. The concern is the scarcity of chips and key components. The industry is not able to produce to its capacity. Industry could easily come close to at least 3.5 lakh dispatches given the full 31 days of March and the strong pent-up demand,” said a senior industry honcho preferring not to be named.
Table 2: A buoyant sales matrix
| Fiscal Year | FY20 | FY21(Feb) | %Change |
| Q1 Sales | 7,12,685 | 1,53,734 | -78.4 |
| Q2 Sales | 6,20,632 | 7,26,246 | 14 |
| H1 | 13,33,317 | 8,79,980 | -34 |
| Q3 | 7,84,800 | 8,97,915 | 14.4 |
| Total | 21,18,117 | 17,77,895 | -16 |
| January’21 | 2,62,714 | 3,03,833 | 15.7 |
| February’21 | 2,51,516 | 3,08,804 | 22.8 |
| Grand Total | 26,32,347 | 23,90,532 | -9.2 |
*Source Auto Industry
This year is also unique as retail sales have been higher than the dispatches as the industry was clogged with incessant demand for personal transport staying much ahead of supplies.
“Retails were much higher than those in other years. Demand for new cars simply outstripped supplies and the stock is at an all-time low. In fact many of the models and popular SUVs are in months of waiting for customers to grab their favourite badge,” says an industry veteran.
The industry is expecting higher retail sales in the fiscal which itself is a great achievement given the uncertainties over the ongoing pandemic. Demand for new cars has been consistently higher on the need for personalized, safer transport and the swelling number of new car buyers.
After the complete washout in April, the car industry took a couple of months to normalise operations as the customers remained skeptical amid an uncertain future and a floundering economy. Now the sales have consistently touched three lakh units for the past few months. Going ahead, the higher liquidity in the market coupled with easier finance options is proving to be a panacea for the industry.
“Sales have been consistently euphoric driven by consistent consumer demand. Since October the monthly sales has been historically the best for every successive month. Likewise January and February carried this highest ever syndrome and March could be no different,” Amit Kaushik, managing director, Urban Science, a US- based consultancy, said.
There’s another side of the story too.
While the industry might find it difficult to hit the sales record, it is likely to decline by 2%, even if it achieves the October’s peak sales or comes closer to it. Within 31 days, the industry could sell around 3.36 lakh units in this March, provided it tides over the semiconductor and component shortages.
The industry has made a smart recovery in the past few months and H2 has been the highest-ever for cars sold in India and the Indian car industry probably has recovered the fastest in the second half of the current fiscal. However the full year peak of 33.77 lakh units achieved in FY19 would be a far cry.
“It is a story of a strong recovery. Despite the first-ever month of zero retail sales in April 2020 and the impact of COVID-19 that continues to haunt the global economy, Indian passenger vehicle industry has performed well with strong sales in the past six months. October to February sales have peaked to record levels and going ahead March could be another surprise to achieve new levels of dispatches,” Rakesh Srivastava, managing director of Nissan Motor India, said.
This year most of the top players like Maruti Suzuki, Hyundai Motor India, Mahindra & Mahindra, Honda Car India, Toyota Kirloskar Motors, and the likes of Ford would be in the negative zone.
The lucky ones are only the fringe players like Nissan Motor, MG Motor, Kia Motor, Renault and the recently-turned around Tata Motors.
However all the high optimism would be in the steep growth in March on a low base of 1,40,910 units sold last year that would help tag the best performance by the industry this year. And the low base of H1 in FY22 could kick in massive percentage growth for the industry.
