Passenger vehicle sales dip 4% in Mar; When will auto industry see revival? | Mint
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Business News/ News / India/  Passenger vehicle sales dip 4% in Mar; When will auto industry see revival?
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Passenger vehicle sales dip 4% in Mar; When will auto industry see revival?

According to SIAM data, in January - March 2022 period, total sales stand at 46,04,242 units versus 55,84,313 units of the same quarter a year ago. Passenger vehicles sales come at 9,20,661 units in Q4FY22 versus 9,33,583 units in Q4FY21.

Overall, the total sales of the auto industry stood at 14,95,848 units down by nearly 18% from 18,20,062 units in March of last year. (Mint)Premium
Overall, the total sales of the auto industry stood at 14,95,848 units down by nearly 18% from 18,20,062 units in March of last year. (Mint)

The auto industry recorded a 4% decline in passenger vehicle wholesales in India for March 2022, however, the drop was massive in two-wheeler vehicles. The industry has been facing supply-side challenges with semiconductor shortages since 2022, and the industry is yet to garner some recovery.

In March 2022, passenger vehicles sales stood at 2,79,501 units of the auto industry, compared to 2,90,939 units in the same the previous year. Of the total, utility vehicles sales rose by 7.9% yoy to 1,32,032 units in March 2022, while passenger cars declined by over 12% yoy to 1,38,031 units in the same month.

In the two-wheelers segment, sales stood at 11,84,210 units in March 2022 declining by 20.88% from 14,96,806 units sold in March last year. From the total, motorcycle sales dropped by 20.9% yoy to 7,86,479 units, whereas, scooter sales dipped by 21.4% yoy to 3,60,082 units in the month under review.

Furthermore, three-wheelers sales was muted to 32,088 units in March 2022, compared to 32,310 units recorded in the same month a year ago.

Rajesh Menon, Director General, SIAM said, “Overall Industry witnessed a de-growth of (-) 6% in FY22. All segments are facing supply-side challenges and the industry is yet to see complete recovery following the disruptions it has been facing since early 2020. Passenger Vehicles, Commercial Vehicles, and Three-wheelers have witnessed a growth compared to a low base of the industry in 2020-21, but the Two-Wheeler segments further declined by (-) 11% from the previous year."

Overall, the total sales of the auto industry stood at 14,95,848 units down by nearly 18% from 18,20,062 units in March of last year.

Kenichi Ayukawa, President, of SIAM said, “The year gone by was full of unforeseen challenges and new learning for the industry. Indian auto industry has worked hard against these challenges to keep the value chain running, indigenize parts, control cost, invest in new technologies, and enhance exports. The Government also came out with targeted support like PLI schemes, FAME scheme extension, etc. "

Elaborating on the sales performance, Ayukawa mentioned, “Despite some recovery from a low base, sales of all four segments of the auto industry are below even 2018-19 level. While some segments like Commercial Vehicles and SUVs are seeing improvement in demand, the mass segments like two-wheelers and smaller cars are facing serious affordability issues. Ofcourse, our immediate challenge in most segments is semiconductor availability."

On export performance Ayukawa said, "We are happy to share that all four segments of the industry have increased their exports. Infact, two-wheelers achieved their highest ever exports. It is good to see that Indian products are becoming more acceptable worldwide for their quality, cost and performance."

According to SIAM data, in January - March 2022 period, total sales stand at 46,04,242 units versus 55,84,313 units of the same quarter a year ago. Passenger vehicles sales come at 9,20,661 units in Q4FY22 versus 9,33,583 units in Q4FY21, while commercial vehicles sales are at 2,49,806 units in Q4FY22 versus 2,10,356 units in Q4 last year, and two-wheelers sales stood at 33,50,497 units in the latest quarter against 43,53,599 units sold in Q4FY21.

For FY22, total sales stood at 1,75,13,596 units against 1,86,20,233 units of the previous fiscal, as per the SIAM data.

Talking about the latest sales data, Vivek Kumar and Ronak Mehta sales at JM Financial said, in Mar’22, PV OEMs' volumes increased sequentially indicating improvement in the chip situation. MSIL reported flat MoM (-7%YoY) volumes in domestic PV. The underlying demand for PVs remains strong with a huge order backlog and lean inventory. In 2Ws, domestic sales continued to be weak due to muted demand. W export demand remained robust. TVSL premium 2W volumes were impacted owing to supply chain constraints. Near-term 2W domestic demand is contingent on improvement in rural sentiment. In the CV segment, volumes continued to recover and are now 20% above Mar’21 levels. Increasing freight rates indicate further improvement during 4QFY22."

The duo at JM Financial further added, "Domestic tractor volume fell significantly YoY owing to the high base. Tractor demand is likely to be supported by improved liquidity in the hands of farmers, good rabi harvest, and healthy reservoir levels. However, growth (%) may stay muted due to the high base.

Going forward, JM Financial analysts said, "2W demand may likely show some strength in the coming months. In the PV segment, wholesales in the near-term are likely to be a function of normalisation of chip supply as underlying demand remains robust. Sequential increase in freight rates since Jul’21 has supported the profitability of CV operators. Large fleet operators have entered the market, while retail purchases are yet to take off. We expect CV volumes to be supported by demand from infrastructure and construction sectors. We expect uptick in CV volumes to sustain as economic activities pick up pace and financing issues/ cash flow constraints are ironed out."

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Published: 13 Apr 2022, 04:51 PM IST
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