After a seemingly never-ending lull in India’s auto segment, India’s battered automakers finally have a reason to heave a short sigh of relief as auto sales have been picking up pace with each passing month on the back of improving semiconductor supplies.
Auto majors like Maruti Suzuki, Tata Motors, Hyundai Motors and Mahindra & Mahindra posted robust sales numbers for the month of July. At 3,24,650 units, the total car sales saw a year-on-year increase of 15.2 per cent in July 2022 as against 2,81,576 units sold during the same period in 2021.
Last Wednesday, Tata Motors Group chief financial officer PB Balaji had said that the semiconductor shortage issue is easing and he expects it to improve further with every passing month.
Post a lingering slowdown, Covid outbreak and an acute semiconductor shortage, the uptick that the sector is witnessing was a long time coming.
Raining Sales In July
The automobile sector was plagued with a global shortage of semiconductors, an important component, since before the pandemic. That had impacted the sales and revenue of car companies due to a delay in car deliveries. For instance, Maruti Suzuki India, India’s largest carmaker, could sell just 1,09,722 cars in November 2021. The easing of that situation seems to have pushed up the auto sales and the same is reflected in the numbers posted by automakers in July this year.
Maruti sold 1,42,850 units, nearly a 7 per cent increase as compared to a total of 1,33,732 units sold in July 2021. The sales of its mini cars—Alto and S-Presso—stood at 20,333 units, up from the 19,685 units sold a year ago. Similarly, sales of compact cars—Baleno, Celerio, Dzire, Ignis, Swift and WagonR— rose to 84,818 units in July 2022 from 70,268 units in the year-ago month, the company said.
With 50,500 units sold, Hyundai Motor India registered a 5.1 per cent yearly growth as against 48,042 units in July 2021.
Tata Motors recorded its highest-ever monthly sales of 47,505 units compared to 30,184 units in July 2021. The automaker sold 43,483 units of its internal combustion engine-powered models, while its three EV models recorded sales volumes of 4,022 units. SUV sales continued to be dominant in Tata Motors’ mix as it constituted more than 64 per cent of the company’s total July 2022 numbers.
Mahindra and Mahindra’s passenger vehicle segment grew by 33.29 per cent to 28,053 units, up from the 21,046 units it sold a year ago. Overall, the company sold 56,148 vehicles. It had sold over 26,880 units in June 2022.
The smaller players in the market also saw some year-on-year respite. While Honda Cars India’s sales went up by 12 per cent to touch 6,784 units, Skoda Auto reported a 44 per cent rise in sales with 4,447 units sold. The company dispatched 3,080 units to dealers in July 2021. MG Motor India, however, fell prey to supply chain constraints and reported a 5 per cent decline in sales at 4,013 units. The company had registered retail sales of 4,225 units a year ago.
Road To Recovery
Over the last two years, carmakers have had to cut production and even lay off staff to deal with challenges thrown at them amid a volley of disruptive events. In December last year, a total of 2,19,421 passenger vehicles were sold in India, down by 13 per cent on a year-on-year basis as per the reports from the Society of Indian Automobile Manufacturers.
The last two months, however, have shown signs of recovery for the sector.
In the first three months of this calendar year, major manufacturers like Maruti Suzuki, Hyundai, and Toyota continued to report a drop in their sales numbers. Maruti Suzuki and Hyundai Motor posted a decline in dispatches as a shortage of components impacted their production. The only automaker that continued its upward march in this period was Tata Motors.
April showed some signs of recovery after some automakers witnessed growth in sales even when Maruti Suzuki and Hyundai posted declining numbers. The auto industry registered a growth of 2.4 per cent with 2,93,081 units sold in April 2022 as compared to 2,86,226 units sold in April 2021.
In May 2022, 2,94,087 passenger cars were sold in the Indian market as compared to a year-ago figure of 1,03,171 units. The spike can be attributed to the low demand last year which was primarily impacted due to Covid-19-induced restrictions.
The June 2022 overall sales numbers of the auto industry stood at 3,06,162 units, a 26 per cent year-on-year growth. The trend seems to be continuing with July.
The numbers indicate an upward trajectory which could further get a boost in the festive season when carmakers would expect to register more sales. Even amid fears of recession, lingering inflation, and other unforeseen national and international events, the uptick comes as a glimmer of hope for the auto industry which was desperately looking for a win.