Home / Auto News / Car sales hit record in Q2 as chip crisis eases

NEW DELHI : Passenger vehicle sales in India scaled a record one million units in the September quarter amid an easing of a global shortage in semiconductor chips and ramping up of production by automakers to meet large customer orders during the festive season.

Wholesales, or factory dispatches, hit about 1.03 million vehicles in the three months ended 30 September, showed data issued by the Society of Indian Automobile Manufacturers (SIAM) on Thursday.

However, sales of small cars fell 44% (mini-segment) and 9% (compact segment) in the fiscal second quarter, from the peak levels of FY19. Utility vehicle sales comprised half of the passenger vehicle market, up from just a third until a year ago thanks to booming demand for sport-utility vehicles. It is now the largest passenger vehicle segment by sales volume. Sales of all passenger vehicles, including cars, rose from a year earlier.

The stress on entry-level consumers was also seen in the two-wheeler segment. Domestic sales of two-wheelers in the 110cc and lower segments (commuter segment) for motorcycles saw a sharp 35% decline to 1.49 million units in Q2FY23, from 2.3 million units in FY19, which was a record for the industry.

Two-wheeler sales came in at 4.67 million units for the September quarter, up from 4.13 million units in the corresponding quarter of last year.

The highest second-quarter volumes clocked by the segment were 5.9 million units in FY19.

High inflation and auto fuel prices, and commodity costs-related price hikes have kept entry-level vehicles out of reach for first-time buyers. “Commodity prices were behaving erratically earlier, but now the pressure is off. However other factors such as general inflation, any other regulatory changes may also necessitate further vehicle price increases," Vinod Aggarwal, president, SIAM, said in an interview.

Commercial vehicle (CV) sales during the September quarter witnessed healthy growth across medium-heavy (M&HCVs) and light (LCV) vehicle categories. CV sales at 232,000 units in the quarter were near the all-time high of 257,000 units in Q2FY19.

Even as domestic sales of two-wheelers grew at a slower pace, two- and three-wheeler exports took a beating in the second quarter as well as in the first half of the year due to geopolitical and currency uncertainties in many overseas markets.

Two-wheeler exports declined by 13% to 956,000 units during the quarter from 1.1 million units a year earlier, while exports of three-wheelers fell 4% from 120,000 to 115,000 during the period.

Growth in passenger vehicle exports, however, remained flat during this period. “The clear reason for exports plummeting is global economic conditions and geopolitical factors. Some countries we export to are witnessing foreign exchange constraints, which is directly impacting imports in those nations. There are also fears of recession in the global markets, which is impacting demand. As of now, exports are under pressure. We are hoping that the Ukraine war gets resolved soon and overseas demand can bounce back," said Aggarwal.

ABOUT THE AUTHOR

Alisha Sachdev

Alisha Sachdev is an assistant editor with Mint based in Delhi. She reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies. She also focusses on developing multimedia properties for Mint and currently hosts the 'In A Minute' series and the Mint Primer podcast. Previously, she has worked with CNBC-TV18 and NDTV.
Catch all the Auto News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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