Auto Wholesales in April 2023: YoY dispatches in green, chip shortage to continue in Q1

New Delhi: The first month of the financial year has been under pressure for the past three years in a row. During April 2020, India was under lockdown and automakers observed zero production and sales. April 2021 began on a good note but ended with a tsunami of cases during the second COVID wave. In April 2022, the economy gradually opened up and consumer sentiments improved but automobile OEMs continued to witness supply chain constraints.

For the first month of FY 2023-24, while the retails were slow, wholesales were in green across the segments. The following is a segment-wise report of the vehicle dispatches to dealers during April 2023.

Passenger Vehicles

According to industry estimates, the PVs marked a growth of 13%, registering sales of about 3.31 lakh units during the month, as against 2.93 lakh units in the corresponding month of last year. However, the retail sales were about 2.85 lakh, compared to about 2.75 lakh, muting a growth of 3.5%.

Shashank Srivastava, Senior Executive Officer- Marketing & Sales, Maruti Suzuki said that the PV industry retail was 2.86 lakh (units) and the wholesale was 3.31 lakh (units) which means that there was an increase in the network stock in the industry, up from 2.04 lakh units at the beginning of the month to 2.51 lakh units now.

“That is sort of a normal inventory we are seeing after a very long time. Retails sales have been slower in this month owing to several reasons, including pre-buying because of the BS-VI Phase-II norms, and also because there were some people who had taken the deliveries in the auspicious period, but they had invoiced the vehicles earlier in March itself,” he said.

Maruti said that the company observed some production loss in April owing to semiconductor issues and lost some volumes, especially in Brezza, Grand Vitara, and the Ertiga. Going forward, the company expects chip shortage to continue in Q1 but expects some recovery in Q2, “although visibility on semiconductor supply remains limited.”

The share of SUVs in the domestic market stands at about 47% during April 2023.

Tarun Garg, COO, Hyundai Motor India said that the double digit growth in the domestic market has been backed by an overwhelming response to its new Verna. The company aims to carry forward this momentum with the Exter SUV, which is expected to launch soon in the market.

Kia said its Sonet emerged as the top contributor to overall sales with 9,744 units, the Seltos and the Carens clocked sales of 7,213 and 6,107 units respectively.

Rohan Kanwar Gupta, Vice President & Sector Head – Corporate Ratings, ICRA Limited said, even as there continues to be concerns regarding moderation in demand on account of the rise in the cost of ownership, the wholesale dispatches were at healthy levels in April 2023, aided by robust order books across OEMs and steady demand.

Domestic dispatches were at about 3.4 lakh units, representing a marginal growth on a sequential basis and about 15% growth on a YoY basis. Even as the production levels of OEMs remained at healthy levels, they continue to be impacted to an extent by a shortage of electronic components, Gupta said.

Toyota Kirloskar Motor said the decline was owing to a week-long maintenance shutdown from April 24-28, 2023 for the upkeep of machinery and equipment to sustain operational efficiencies, productivity and safety.

The supply chain constraints remain in a few models; however, the company is working towards meeting customer demand. The coming months are expected to bring in further improvements on this Front, MG said.

Srivastava of Maruti Suzuki said that going forward there are some red flags like inflation and possibility of weakness in rural sentiment, so there are mixed signals for market outlook.

Two Wheelers

Hero MotoCorp expects the momentum to build-up in the coming months on account of a combination of multiple factors, including a slew of new product launches, a healthy growth in country’s GDP and positive consumer sentiments.

Scooter sales for the company increased to 27,277 units in April from 25,995 units April 2022. However, motorcycle sales dropped this year to 368,830 units as against 392,627 units in April last year.

Commercial Vehicles and Three Wheelers

In the domestic CV market, VE Commercial Vehicles Ltd. (A Volvo Group and Eicher Motors joint venture) reported Eicher branded trucks & buses sales of 6,142 units in April 2023 as compared to 4,766 units in April 2022, representing a growth of 28.9%. Volvo Trucks and Volvo Buses have recorded sales of 168 units in April 2023 as compared to 109 units in April 2022, representing a growth of 54.1%.

Tractors

“Festive preponement impacted sales in the month of April. Due to preponement of the key festive season this time to March 2023 as against April last year, combined with unseasonal rains impacted sales for the month. Going forward, due to positive macroeconomic factors on account of good rabi harvest, improved crop prices and adequate water reservoir levels, we expect demand momentum to improve across geographies, for the quarter,” Escorts Kubota said.

This is a developing story. We will keep updating as the OEMs release their sales data.

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