Home / News / India /  PV dispatches continue rise in July; chip shortage may hit future supplies

NEW DELHI : India's leading passenger vehicle (PV) manufacturers continued to increase wholesale dispatches of vehicles to dealerships in July, compared with the preceding month on the back of reopening of dealerships in most states across the country, pent-up demand for vehicles, and an inclination for personal mobility to avoid covid infection. Vehicle dispatches fell substantially in April and May due to an explosive increase in covid cases, which led to dealerships and factories being shut down.

PV sales increased by 14.16% month-on-month (m-o-m) to 264,442 units compared with 231,633 units in June, as a result of 7.16% jump in dispatches of passenger cars to 130,080 units and 23.12% increase in sales of utility vehicles to 124,057 units, according to wholesale data released by Society of Indian Automobile Manufacturers (SIAM) on Wednesday.

In Q4FY21, most PV manufacturers reported sustained recovery in retail sales, while supply constraints due to the shortage of semiconductors led to high waiting period for certain vehicles and a depleted vehicle inventory. Therefore, leading manufacturers started production in all three shifts from the second half of June. Production schedule of most manufacturers, though, will be impacted by the shortage of semiconductors.

Maruti Suzuki increased its domestic dispatches on a sequential basis by 9.83% to 136,500 units compared with just 124,280 units in June. Hyundai also reported 18.63% m-o-m wholesales of 48,042 units in June compared with just 25,001 units the month before. Wholesales of Mumbai based carmaker, Tata Motors Ltd, jumped by 25.19% to 30,185 units as demand for its new products such as Altroz continues to be steady.

According to Rajesh Menon, director general, Society of India Automobile Manufacturers, the automobile industry continues to face heavy headwinds in the form of global semiconductor shortage and steep rise in commodity prices.

“Amid such challenging and uncertain business environment, industry is trying to maximize production and sales. However, sales for the period of April to July 2021 for passenger vehicle segment are still lower than the level of 2016-17; for two-wheeler segment, still lower than the level of 2010-11; and three-wheeler segment has been pushed back by many years," added Menon.

The auto industry came under pressure from the first week of April, when Maharashtra began strict lockdown measures. Delhi, Haryana, Karnataka, Tamil Nadu and others followed suit. Maruti Suzuki, Hero MotoCorp Ltd, Hyundai, and others either stopped production or reduced output significantly.

Some such as Bajaj Auto Ltd, however, continued to operate with limited capacity to meet export orders. With a steady drop in infections, especially in north and south India, most automakers have resumed operations from the middle of May.

Vehicle sales are usually compared on a corresponding basis, but in March, last year, automakers had to close down their respective factories and showrooms, as the Union government imposed stringent nationwide lockdown from 18 March. Subsequently, operations remained suspended till the first week of May and return to normal production schedule took place only from July.

Sharp fall in cases in rural markets and easing of restrictions also helped increase dispatches of two-wheelers by 18.6% to 1,253,937 units in July compared to 1,055,777 units in the preceding month. Wholesale of scooters jumped by 51.5% to 366,292 units, while the same for motorcycles grew by 18.76% to 1,253,927 units.

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