The festive season failed to drive auto sales, as the industry continued to battle supply-side challenges due to the ongoing semiconductor shortage. Wholesale despatches by automakers declined for the third month in a row in November. The fall in auto sales numbers was along expected lines, as a chip shortage continues to hit supply chains of automakers globally. Also, production cuts announced by companies since August has resulted in lower despatches. India’s largest passenger vehicle manufacturer, Maruti Suzuki, said last month that the production cuts will continue in November, when it is expected to be 85% of the normal production.
However, the resumption of economic activity, which has improved freight availability, led to strong commercial vehicle sales during the month. Demand for intermediate commercial vehicles, tippers and some replacement demand for multi-axle vehicles improved CV sales volumes. While Tata Motors posted a good jump in wholesale numbers, Ashok Leyland reported a moderate decline.
Maruti Suzuki sold 1,13,017 units in November, registering a decline of 18.6% on a year-on-year basis. It again missed its traditional average monthly sales of 1.5 lakh units per month. However, the sales remained flat compared to October, which should come as a breather, because the October sales of 1,12,788 units, was a steep decline of 32.4% y-o-y. Maruti said on Wednesday that the semiconductor shortage primarily affected the production of vehicles sold in the domestic market, though it took all possible measures to minimise the impact.
Hyundai Motor India’s domestic sales declined by 24.2% y-o-y to 37,001 units in November, which it attributed to the ongoing semiconductor shortage. The wholesale numbers remained flat versus October 2021.
Tata Motors total domestic wholesales were up 21% y-o-y to 58,073 units, the bulk of which came in from strong growth in passenger vehicle sales registering 38% y-o-y growth in November.
Mahindra and Mahindra (M&M) clocked total domestic sales of 37,001 units, suffering a decline of 10% y-o-y, while the sales on a m-o-m basis fell by 4.5%. However, passenger vehicles sales increased 7% y-o-y to 19,458 units. Veejay Nakra, chief executive officer (automotive division), M&M, said, “Our growth in SUVs continues with an 8% increase in the month of November. The demand remains strong across our product portfolio of SUVs, pick-ups, and small commercial vehicles. Momentum in exports continues with a 90% growth. The issues around semi-conductor related parts continue to remain a challenge for the industry. We are monitoring the situation closely and taking appropriate steps.”
Tractor sales at M&M also moved into slow lane in November registering a fall of 17% y-o-y to 26,094 units, which was on account of high base last year and incessant rains in some states. Hemant Sikka, president (farm equipment sector), M&M, said, “Rural sentiments continue to remain positive on account of good Rabi sowing and high reservoir levels. Escalation in procurement for Kharif crop will bring steady cash flows, which is expected to boost tractor demand going forward.”
The chip shortage, however, seems to have escaped Toyota Kirloskar Motor (TKM), which recorded a sharp 53% y-o-y increase in sales numbers to 13,003 units, and 4.5% rise on a m-o-m basis.
V Wiseline Sigamani, associate general manager, (sales and strategic marketing), TKM, said, “Demand from the market continues to be strong which is duly reflected in our booking orders and we are trying our best to cater to these orders”.
Commercial vehicle manufacturer Ashok Leyland registered a moderate y-o-y decline of 4% as it sold 9,364 units during the month. Tata Motors, on the contrary, recorded a good 15% y-o-y jump in commercial vehicle sales with 32,245 units sold.
A decline in rural incomes, which continues to reel under the impact of Covid-19, cast a shadow on sales of two-wheeler manufacturers. Bajaj Auto sold a lower number of vehicles in November as the vehicle sales declined 20% on a y-o-y basis to 1,58,755 units.
TVS Motor Company’s wholesale despatches decline a sharp 29% y-o-y to 1,75,940 units, led by over 29% y-o-y decline in scooter sales during the month, while motorcycle sales remained flat compared to November 2020.
