June may offer respite to automakers, but overall sentiment remains flat

The month of June not only marks the beginning of the monsoon season but also plays a key role in understanding the consumer sentiments in the automotive segment. While the first quarter of the new fiscal is not a straight answer to the days to come, it surely hints at a tough year ahead.

The month of June not only marks the beginning of the monsoon season but also plays a key role in understanding the consumer sentiments in the automotive segment. While the first quarter of the new fiscal is not a straight answer to the days to come, it surely hints at a tough year ahead. 

The automotive industry in India just like its global counterparts is seeing year-on-year improvement, thanks to a low-year ago base, the semiconductor shortage, geopolitical situation, and the rise of Covid-19 cases in China again disrupting the component supply chain. The industry is seeing new challenges each passing day. 

The country’s largest carmaker, Maruti Suzuki India is all-set to launch the tech-laded new generation Brezza SUV this month, but just like other automakers, the supply chain disruption has dented its plans to be able to completely meet its production targets. The company is likely to produce around 1.56 lakh vehicles in the month of June, which is 6 per cent higher YoY but 3 per cent lower compared to the previous month. 

For Mumbai-headquartered Mahindra & Mahindra, which has seen robust demand for its new range of passenger vehicle offerings – Thar SUV, XUV700 and is set to launch the new generation of Scorpio-N. But on the other hand, the company is unable to meet its production commitments, in some cases, the waiting period for vehicle models are running upto 24-months. The company is expected to produce around 51,000 passenger vehicles, which is higher by 55 per cent albeit a low-year ago base, but 5 percent lower than what it did in the month of May 2022. On the farm equipment side, the company is set to produce around 39,000 vehicles which is 19 per cent lower YoY, but 8 per cent higher compared to the last month.

Tata Motors has somewhat been able to tread in a cautious manner. The company will produce around 34,000 commercial vehicles and 44,000 passenger vehicles, which is an increase of 74 per cent and 82 per cent respectively over the last year. But just 8 per cent and 2 per cent higher than the previous month respectively.

Similar is the case for Ashok Leyland and Eicher Motors too, a rise of 8 per cent and 3 per cent over the previous month, the OEMs have planned production of around 14,000 units and 5,800 respectively. 

In the two-wheeler space, the world’s largest two-wheeler maker Hero MotoCorp will produce about 4.5 lakh units, which is 4 per cent lower YoY and 8 per cent lower on MoM basis. 

Bajaj Auto is expected to produce more than 3.1 lakh units, which is 10 per cent lower YoY, but 12 per cent higher compared to the previous month. 

TVS Motor Co is expected to produce 3 lakh two-wheelers, which is just a per cent higher compared to the previous month, but 21 per cent YoY higher albeit a low-year ago base. 

It is important to note that while there is a growing demand in the premium passenger vehicle space, the demand for the entry-level products has been impacted. This is partly thanks to increase in the prices of vehicles, as well as, OEMs prioritising the production of models which offer higher margins. 

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