PV bookings swell ahead of festive season

Automakers like Maruti Suzuki India and Hyundai Motor India together have over 450,000 pending orders. Mahindra & Mahindra had more than 143,000 pending deliveries at the beginning of July.

PV bookings swell ahead of festive season
According to data shared by the industry body Society of Indian Automobile Manufacturers (Siam), the production of PVs fell 2.4% to 928,358 units in Q1FY23 from 950,954 units in Q4FY22.

Despite the semiconductor shortage hampering production and leading to long waiting periods for popular models, there is no dearth in the passenger vehicle (PV) demand, which only seems to increase with the festive season approaching. Automakers like Maruti Suzuki India and Hyundai Motor India together have over 450,000 pending orders. Mahindra & Mahindra had more than 143,000 pending deliveries at the beginning of July.

Although the supply of semiconductors is getting better, it has not stabilised yet, as can be seen from the production figures. According to data shared by the industry body Society of Indian Automobile Manufacturers (Siam), the production of PVs fell 2.4% to 928,358 units in Q1FY23 from 950,954 units in Q4FY22.

However, the PV manufacturers are not only trying to procure semiconductors from alternative sources but also adjusting their production schedules and are being flexible in terms of model mix to meet the growing demand.

Maruti is currently sitting on a backlog of more than 320,000 orders across all models. “The current situation is very dynamic, though the semiconductor shortage issue is easing out, but being a global issue, it is still difficult to give a definite timeline on normalcy or 100% production level currently. The current challenge is to ramp up production to ensure timely supply of vehicles to customers,” said Shashank Srivastava, senior executive director, marketing and sales, Maruti Suzuki India.

Srivastava said that the company has been adjusting production schedules to manufacture high-demand models on priority, at the same time, working closely with vendor partners to maximise component supplies.

For Maruti’s PVs, the pending bookings are nearly 106,000 for the Ertiga, while the Brezza and Baleno have 45,000 and 33,000, respectively.

Tarun Garg, director, sales, marketing and service, Hyundai Motor India, said that the semiconductor situation is easing off and will be better in the second half of this year compared to the first half. “However, we cannot still say that the pain is completely over. We will have to wait for CY23 for it,” he added.

We are trying to procure as many semiconductors as possible, Garg said, adding that the company is being very flexible in terms of production and model mix.

Hyundai has a backlog of 130,000 bookings, with a bulk of orders being for SUVs like the Creta and Venue. “Hopefully, we will be able to supply more vehicles in the upcoming festive season due to the better semiconductor situation,” Garg noted.

As of July 1, Mahindra had 143,000 open bookings in total, with 80,000 for the XUV700, 26,000 for the Thar, 15,000 for the Bolero, including the Bolero Neo, and 14,000 for the XUV300.

“In view of growing demand for our SUVs, we anticipate strong bookings this festive season. Demand is extremely strong for the Bolero Neo, XUV300, Thar and XUV700,” said Veejay Nakra, president – automotive division – Mahindra & Mahindra. With the bookings for the recently-launched Scorpio-N opening on July 30, the company is expecting its order book to increase substantially.

Nakra said that Mahindra took several steps, including creating alternative sources for chips, market buying of ICs, etc, which contributed to improved volumes. The company’s utility vehicle sales increased 43.8% to 223,682 units in FY22 from 155,530 units in FY21.

“However, we continue to see challenges on some specific semiconductor related parts on account of the supply-chain related disruptions due to the Ukraine-Russia conflict and recent Covid resurgence in China,” Nakra observed.

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