October 2021 sales: PVs marred by supply constraints, 2Ws in red, CV sales improve

New Delhi: Diwali is here and so is hope for a better business for the automotive OEMs.

Normally, the festive season sales account for about 40% of the annual vehicle sales. But this year the unprecedented supply chain disruptions, fuel price hikes, increase in input costs and consequent vehicle price rise, and the economic slowdown after the COVID second wave marred the September and October sales.

Consumer demand has been positive across the segments, two-wheeler wholesales have improved month-on-month, commercial vehicle sales are witnessing a gradual recovery.

However, as anticipated, passenger vehicle dispatches to dealers were affected because the supply did not equal or surpass the consumer demand. Most car models remain in the waiting list and even though wholesales for some automakers were better than September 2021, they remained in the red on a year-on-year basis for the market leaders.

The following is a segment-wise report of vehicle sales in October 2021.

Passenger vehicles

The top two carmakers of the Indian auto industry reported a fall in domestic sales ranging from 30%.

Market leader Maruti Suzuki India Limited (MSIL)’s mini passenger vehicles Alto and S-Presso clocked 21,831 unit sales in October 2021, compared to 28,462 units in October 2020. Compact passenger vehicles including Baleno, Celerio, Dzire Ignis, Swift, Tour S, and WagonR logged 48,690 units in the month under review, against 95,067 units in October last year.

While the shortage of electronic components continued to affect the production of vehicles during the month, the company took all possible measures to minimise the impact. Accordingly, the company sold more vehicles than the expected sales volume at the start of the month, the carmaker said in a regulatory filing.

MSIL sold 27,081 units of its UVs which include Ertiga, Gypsy, S-Cross, Vitara Brezza, and XL6 as against 25,396 units in October 2020. Sales for the mid-size Ciaz segment stood at 1,069 units during the month under review compared to 1,422 units in the corresponding month last year.

On Saturday, Maruti Suzuki said it expects an adverse impact on production at its two plants in Haryana and parent Suzuki’s Gujarat plant in November owing to the supply constraints of electronic components because of the semiconductor shortage.

The passenger vehicle sales of Hyundai Motor India declined by 34.6% to 37,021 units in October 2021 against 56,605 units sold in the same month last year.

As an exception, auto major Tata Motors reported 44% sales growth in October 2021, retaining its third position. The carmaker said it sold 32,339 units of ICE cars and 1,586 units of electric cars during the month under review.

Riding on new model launches, other carmakers like Mahindra, Nissan and Skoda also managed to post growth in sales, over the same month last year. This comes despite the supply chain challenges.

Mahindra sold 20,130 unit passenger vehicles in October 2021, where the utility vehicle segment accounted for 20,034 vehicle sales.

According to Veejay Nakra, chief executive officer, automotive division, M&M, “Demand for vehicles across our product portfolio remains robust. We have received an unprecedented response for XUV700 and as per our commitment we have commenced deliveries of the petrol variant to customers. Exports remain strong with a 57% increase. The supply chain issues around semiconductor- related parts continue to be dynamic as we focus on managing the situation in the short term.”

Hyundai’s sister concern Kia India said it dispatched 10,488 units of Seltos, 5,443 units of Sonet, and 400 units of Carnival to dealers during October 2021.

Tae-Jin Park, MD and CEO, Kia India, said, “The adverse supply chain situation has been an opportunity lost for us; however, our customers’ and vendors’ continuous support has enabled us to maintain a healthy performance throughout the year. As we foresee the issue to continue for the next few months, we assure our customers to keep optimising our production to the maximum level and ensure delivery at the earliest.”

According to MG Motor, while the global chip shortage has hampered production resulting in lower sales, the challenge to ensure timely deliveries is likely to persist through November and December and it expects this to get better in Q1 next year.

V Wiseline Sigamani, associate general manager (AGM) (Sales and Strategic Marketing), TKM, said, “Demand in the market has been robust in the last few months and this can be attributed to various factors besides pent up demand. Customer orders too have been on a constant rise, restoring normalcy in demand trends when compared to pre-Covid times.”

Honda Cars India senior vice-President and Director (Marketing and Sales) Rajesh Goel, said, “In terms of demand, the festive buying kept pace with last year and continues to show good momentum. Our factory despatches during October 2021 increased by 20% compared to September 2021, and we were able to wholesale our entire factory stock of the month,”

Two-wheelers

Two-wheelers remained in red on a year-on-year basis as sales were down in double digits across the segment. However, on a sequential basis two wheeler OEMs reported a rise in dispatches in October this year over the month of September, except HMSI.

According to the country’s largest two-wheeler maker Hero MotoCorp, “Demand in the festive season has been building up as we move towards Dhanteras and Diwali, and we expect healthy retail over the coming weeks.”

With the economy gradually opening up with several other positive indicators, such as encouraging farm activity and surge in preference for personal mobility, a swift revival in sales is expected in the coming months, the company said.

Yadvinder Singh Guleria, director, sales and marketing, Honda Motorcycle & Scooter India (HMSI), said, “With the much awaited festival season in progress, we are witnessing a gradual rise in engagement registering more enquiries from prospective customers with each passing day. The 2Ds (Dhanteras & Diwali) are just around the corner and we expect this auspicious period to amplify the positivity in terms of conversions.”

TVS Motor said it sold 1,72,361 motorcycles in October as against 1,73,263 units in same month a year ago. Scooter sales were at 1,13,124 units last month, down from 1,27,138 units sold in October 2020. The company expects the retails to improve significantly in the coming months

Devashish Handa, vice president, Suzuki Motorcycles said, “As we enter the festive season in India, the good news is that demand is back in the market. However, there are challenges like the longer than expected supply chain disruption and consistent rise in input cost. We are hopeful that the situation will improve soon and we shall be able to fully cater to the demand,” he added.

Commercial vehicles

Commercial vehicle (CV) sales in October 2021 were in the green, except for Mahindra & Mahindra which posted a 21% decline in year-on-year sales.

Segment leader Tata Motors sold 7,644 units of M&HCVs, 5,599 units of I&LCV, 958 units of passenger carriers, and 17,025 units of SCV cargo and pickups.

Hinduja Group flagship Ashok Leyland’s domestic sales of medium and heavy commercial vehicles were at 5,254 units as against 3,881 units in October 2020, a growth of 35%. However, sales of light commercial vehicles in the domestic market were down 4% at 4,789 units last month as against 5,004 units in October 2020.

Tractors

Hemant Sikka, president, farm equipment sector, Mahindra & Mahindra, said, “With rapid Covid vaccination drive exceeding 100 crore doses in the country, the economy has started gaining momentum, while rural economic activity continues to be resilient. The monsoon, though normal, has ended with heavy rainfall in September and October. This has resulted in delayed harvesting of Kharif crop, while leading to higher reservoir levels and moisture content for Rabi crop.”

“Expectation of a good Kharif harvest, coupled with good preparations for Rabi crop and the upcoming festivities, will boost positive sentiments and drive demand in the coming months. In the exports market, we have sold 1597 tractors with a growth of 65% over last year,” he said.

Farm machinery and construction equipment major Escorts noted that festival period of Navratri and Dussehra witnessed good footfalls and delayed sowing and harvesting cycle of the current Rabi crop augurs well for festive retails for industry during November too, coupled with overall positive rural sentiments on account of good rainfall, expected good yield and crop production, higher crop MSPs and better retail finance availability.

However, it noted that inflation continues unabated and is putting a pressure on the company’s margins.

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

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