Automotive industry hits reverse gear with a distant recovery, Auto News, ET Auto

New Delhi: March 2021 portrays a grim picture. All the segments in the automotive planet are in the adverse. The marketplace is grappling with new issues which are further than the production woes and chip shortages. Most of the automakers are not in a situation to source plenty of of their common makes main to large waiting periods.

Passenger motor vehicle sales recovered rapid in fiscal 2020-21with a mere two.24% fall. But 3-wheeler sales dropped a large sixty six% in the fiscal to two.16 lakh units.

Only passenger automobiles and tractors saw nutritious expansion in excess of the past several months even though this could be associated with numerous factors like the reduced foundation of previous 12 months, transition from BS-IV to BS-VI and India likely under total lockdown.

Marketplace pundits predict a tougher 2022 fiscal specified the broader uncertainty and world problem of materials that disrupt production schedules. “This is an unprecedented time with no clarity on the production timelines. The largest problem is to have streamlined production with shortages of numerous items, likely significantly further than the chips as the world container crisis deepens by each individual passing day,” a senior executive, preferring anonymity, claimed.

In addition to the production woes, 2020-21 would also be recognised for marketplace share blues. The section chief Maruti Suzuki gave in a important sum of its pie to rivals in the absence of fresh new launches and new items. Maybe 2020 was the first 12 months when the firm unsuccessful to launch any new product or service or system regardless of the Auto Expo in February 2020.

“The lack of any new product from mum or dad Suzuki Motor Company is reflecting on Maruti’s general performance. Its pipeline hasn’t been refreshed, even though most of the versions and platforms are getting rid of sheen. Rival Hyundai introduced 11 new cars in excess of the past two years and consolidated its situation in the SUV marketplace. Maruti has not been ready to churn out new versions to face the level of competition prevailing in the marketplace,” a senior car marketplace executive claimed.

Maruti Suzuki posted a marketplace share of forty seven.71% in the previous fiscal towards 51% in the corresponding earlier fiscal. New players like Kia and MG and the standard rival Tata Motors seem to be to have entered into its territory.

Infographic: Industry Share Blues

*Source: Marketplace experiences

Some marketplace gurus say that the absence of SUV versions is proving as well high-priced for quite a few firms. “The details portrays a grim picture for firms lacking SUVs in the portfolio. The young Indian customers desire the better stanced automobiles. They have shifted to new age SUVs that are trusted and agile, even though offering the ease of driving like a compact car or truck,” suggests Amit Kaushik, handling director of City Science, a US-based mostly consultancy.

The noteworthy losers are Honda Auto India, Ford Motor India, Skoda Auto and Mahindra and Mahindra. They permit off their ground to the Korean duo Hyundai-Kia and other new entrants.

Sluggish Commercial Automobiles stay a worry

If the commercial motor vehicle sale is the barometer of economic expansion, for India it is steeply down with no definite indications of recovery. A 20.77% drop in the sale of commercial automobiles to five.69 lakhs units, that as well on a reduce foundation, raises thoughts in excess of the true challenges bothering the economic climate and the Indian freight marketplace.

A senior executive of a commercial motor vehicle firm claimed that the normal sentiments are weak as not only the domestic marketplace but also the abroad orders stay sluggish affecting overall expansion. “The normal tendency is that following two-3 years of cyclical downturn the marketplace swings again, but this time is distinctive. There isn’t really any visible modify that would make the variation and bring again the desire,” he claimed, preferring not to be named.

Even the fourth quarter, with indications of recovery in segments like passenger automobiles, proved to be a dampener for commercial automobiles.

“Only passenger motor vehicle section grew to 9.34 lakh device sales, marginally above the earlier superior of Jan-March 2018 at eight.sixty two lakh units. For the commercial automobiles, sales at two.ten lakh in Jan-March 2021 had been beneath the two.eighty two lakh units marketed in Jan-March 2018,” Rajesh Menon, director normal, SIAM, claimed even though releasing the fiscal details for the marketplace.

Two wheeler are not out of the woods

India is the world’s premier two wheeler producer and exporter. This 12 months was fully distinctive. Product sales of two-wheelers, mostly bikes and scooters, recovered and posted positive expansion in the course of the festive time period but fell drastically following that. For most of the makes and items the marketplace proceeds to be sluggish.

The section remained adverse even on a reduce foundation of previous 12 months when sales had been afflicted by the impending transition to BS-VI from April 2020, and also by the Coronavirus pandemic and the nationwide lockdown from mid-March.

Sanjay Bhan, head – world business enterprise, Hero MotoCorp, claimed, “Hero MotoCorp’s world business enterprise has been gaining traction and we are optimistic of retaining the nutritious expansion trajectory across geographies in the coming months.”

In FY21, even though the overall car marketplace witnessed important disruptions brought on by the Coronavirus pandemic which limited shopper motion, two-wheeler sales had been specially hit with the issues of rampant position losses and business enterprise downturn.

Corporations like Honda Bike and Scooter India, TVS Motors, Bajaj Auto, Suzuki Motorcycles India and Yamaha remained under anxiety with desire tapering off in the fourth quarter. Two-wheeler sales in Jan-March 2021 had been at 43.54 lakh units towards the Jan-March 2018 figures of 51.thirteen lakh units.

A few Wheeler stay in the Dump

There has been no word from the makers of 3-wheelers which continue to reel under the pandemic complications. A few-wheeler is the worst performing section with no indications of revival. According to the SIAM details sales of all the players had been adverse by enormous margins. All round sales dipped sixty six.06% to two.16 lakhs units.

There are no true incentives to purchase an ICE engine 3-wheeler and quite a few players like Mahindra Auto and Kinetic are main the modify to EVs. While the motor vehicle selling prices are continuously on the rise owing to BS-VI emission norms and expanding raw substance selling prices in normal, the reduced-income category customers are not ready to spend EMI’s owing to bad income. This coupled with the social distancing norms and closure of instructional and commercial establishments and places of work are maintaining riders away.

The Upcoming

The outlook remains bleak amid the overall uncertainty in the marketplace with the disruption in the source chain owing to semiconductor and raw substance shortages, and lockdowns. In an atmosphere of uncertainty, it is hard to predict the upcoming. However, the moments ahead of the Indian automotive marketplace stay to be very challenging.

In the overall price chain only tractors experienced a aspiration run as rural incomes improved following successive monsoons and superior rabi production. With a ordinary monsoon for the third successive 12 months likely, tractors are predicted to conduct effectively in FY22 also.

The 2nd wave of COVID-19 is not only spreading rapid, but is also destabilizing the expansion which the nation realized in the past several months. The impending lockdown may possibly seriously hamper the momentum of the car industry’s endeavours to arrive out of the woods.