December 3, 2022

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Sequential growth continues, long way to go for recovery, Auto News, ET Auto

 For the automobile industry in India a return to the path of normalcy and striking a balance between demand and supply appear to be long away.
For the automobile industry in India a return to the path of normalcy and striking a balance between demand and supply appear to be long away.

New Delhi: A majority of automakers have recorded growth in wholesale dispatches on a month-on-month basis in January 2022. The sales numbers have increased from December 2021, but for many OEMs they are far below those in January 2021. Relaxing of COVID-19 restrictions, growing demand for electric vehicles and growth in exports are some of the near- term positive factors for the auto sector.

However, for the automobile industry in India a return to the path of normalcy and striking a balance between demand and supply appear to be long away. Vehicle price hikes, increase in commodity prices, spike in fuel prices, supply chain bottlenecks and the fear of the pandemic playing a spoilsport are among the obstacles to the industry’s race ahead.

The following is a segment-wise report of the vehicle sales in January 2022.

Passenger Vehicles

Barring Tata Motors and Skoda Auto, whose sales rose on a low base of last year, most top selling car makers reported a decline in their vehicle dispatches to the dealers in January 2022. A few others who were in green witnessed marginal growth on a year-on-year (YoY) basis.

Country’s largest carmaker Maruti Suzuki India Limited (MSIL) reported a 7% drop in its domestic PV dispatches to the dealers.

Total domestic sales (including passenger vehicles and light commercial vehicles) for Maruti Suzuki stood at 132,461 units in January 2022, as against 142,604 units in the same period last year.

According to MSIL, the shortage of electronic components had a minor impact on the production of vehicles which are primarily sold in the domestic market and the company took all possible measures to minimize the impact.

Tata Motors, which surprisingly grabbed the second position in December 2021 sales in about a decade, sold about 3,000 less vehicles than the South Korean Hyundai Motor India during January 2022. Nevertheless, the homegrown carmaker reported a stellar performance with sales of 37,885 units of ICE cars in January 2022, a growth of 43% over 26,464 units sold in January 2021. Alongside it has reported sales of 2,892 units of electric cars in January 2022 as against just 514 units sold during the same month last year.

Hyundai’s sister brand Kia India said it anticipates that the supply chain constraint will remain for a few months, but with careful planning and market estimation, production would remain stable in relation to current market trends. “The company expects the semiconductor situation to show signs of recovery from the second quarter,” the company said.

The Seltos SUV has been the carmaker’s growth driver with contribution of 11,483 units in January 2022.

Domestic Sales January 2022 January 2021 % change
Maruti Suzuki 128,924 139,002 -7
Hyundai 44,022 52,005 -15
Tata Motors 40,777 26,978 51
Mahindra & Mahindra 19,964 20,634 -3
Kia India 19,319 19,056 1
Honda Cars 10,427 11,319 -8
Toyota Kirloskar 7,328 11,126 -34
MG Motor 4,306 3,602 20
Nissan India 4,250 4021 6
Skoda Auto 3,009 1,004 200

According to Yuichi Murata, Director (Marketing and Sales), Honda Cars India, “The sales in January 2022 got partially impacted owing to the weekend-lockdowns in some cities, but the overall situation looks positive and steady.”

All of the company’s production has been getting dispatched to dealer partners in time, he added.

Two-wheelers

Country’s largest two-wheeler maker Hero MotoCorp reported 3,57,845 unit sales of motorcycles and 22,631 scooters during January 2022, marking a decline against 4,49,037 unit motorcycles and 36,852 scooters sold in the corresponding month of the last year. However, the company’s exports for January 2022 saw an increase to 21,816 units over 18,113 units in January 2021.

“The third wave of pandemic, subsequent staggered state-wise lockdowns and restricted movement impacted the overall sales volume of the month,” Hero MotoCorp said in a statement.

Honda Motorcycle & Scooter India (HMSI) reported total sales of 354,209 units, which include 315,196 domestic sales and 39,013 exports, in January 2022.

Yadvinder Singh Guleria, Director, Sales & Marketing, HMSI, said, “While the calendar year 2022 has started on a positive note compared to last month, the sales sentiment in Q4 FY22 continues to reflect the preceding challenges of last fiscal year. However, visible signs of healthy recovery do appear on the horizon and we are hopeful that the progress in vaccinations, dip in the daily reported COVID cases, and easing of restrictions across states will help us gain momentum in the upcoming quarters.”

“This year’s Union budget also reflects a growth-oriented approach with an impetus on infrastructure and inclusive development. The focus on capital expenditure will pull the economy forward in unison and is expected to have a multiplier effect in the long term,” he said.

Bajaj Auto’s total vehicle sales were reported at 3,23,430 units, including 1,87,934 exports and 1,35,496 domestic sales. On a YoY basis, the sales were in the red across the category.

Domestic Sales January 2022 January 2021 % change
Hero MotoCorp 3,58,660 4,67,776 -23
HMSI 3,15,196 4,16,716 -24
TVS Motor 1,67,795 205,216 -18
Bajaj Auto 1,35,496 1,57,404 -14
Suzuki Motorcycles 60,623 57,004 6
Royal Enfield 49,726 64,372 -23

For TVS Motors, motorcycle sales registered 137,360 units in January 2022 as against 136,790 units in January 2021. Scooter sales of the Company stood at 80,580 units in January 2022 as against salec of 98,319 units in January 2021. “The production and sales of premium two-wheelers were severely affected due to the shortage of semiconductors. We are cautiously optimistic that this will improve in the coming months.”

Commercial Vehicles

The segment which directly reflects the state of the country’s economy has been on a slow recovery. During January 2022, most OEMs reflected a marginal single digit growth on a YoY basis.

Veejay Nakra, Chief Executive Officer, Automotive Division, M&M Ltd, said, “We continued our growth trajectory with an overall growth of 20% in January 2022. Our commercial vehicles registered growth across all segments and ended the month with an overall impressive growth of 58%. We launched the ‘Highest Mileage or Give Truck Back’ guarantee on our entire HCV, ICV and LCV truck range, which has received a very positive response from the market.”

Domestic Sales January 2022 January 2021 % change
Tata Motors 31,708 30,671 3
Mahindra & Mahindra 23,979 16,229 48
Bajaj Auto 14,160 13,353 6
Ashok Leyland 12,709 12,359 3
TVS Motor 12,649 12,553 1
VECV 4,632 5,118 -9

For Ashok Leyland, M&HCV sales in the domestic market stood at 7561 units as against 6839 units in January last year. LCV sales were recorded at 5148 units compared to 5520 units in the same month last year.

VE Commercial Vehicles (VECV), a joint venture between Volvo Group and Eicher Motors, reported a drop of 9% for YoY domestic sales. Eicher branded trucks and buses recorded sales of 4523 units in January 2022 compared to 4964 units in January 2021, representing a decline of 9%. Volvo Trucks and Buses recorded sales of 109 units in January 2022 compared to 154 units in January 2021, representing a decline of 29%.

Tractors

Hemant Sikka, President – Farm Equipment Sector, Mahindra & Mahindra Ltd, said, “On the back of good rainfall and high moisture content in the soil, rabi sowing has been very good, and this bodes very well for a bumper harvest. Continued Government focus on agriculture, rural infrastructure and higher cash flows with rabi harvest, will lead to positive sentiments and increase in tractor demand.”

In the exports market, M&M sold 1520 tractors, registering a growth of 25% over last year.

Domestic Sales January 2022 January 2021 % change
Mahindra & Mahindra 21,162 33,562 -37
Sonalika
Escorts 5,103 8,510 -40

According to Escorts, industry wholesales continued to be impacted in January 2022, due to unseasonal rainfall in certain parts of the country, high base of last year and inflationary impact on short term demand leading to higher level of channel inventory in certain geographies.

“Going forward, with improved liquidity for the farmers, overall high rabi sowing and good water level in reservoirs, we expect, will help boost demand recovery in the coming months,” the company said in a statement.

(This is a developing story. We will keep updating the numbers as the companies release their sales data.)

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In the passenger vehicle segment, the automaker witnessed a growth of 51% to 40,777 units in January this year, as against 26,978 units in the corresponding month last year.

Total domestic sales (including passenger vehicles and light commercial vehicles) were at 132,461 units in January 2022, as against 142,604 units in the same period last year, the company reported.