India's Passenger Vehicle Sales Rise 19.06 Per Cent YoY In June, Nomura Projects Stronger PV Dispatches From July

A slew of significant measures by the government to ease the inflationary pressure and support the purchasing capacity of the common man alongwith a growing ease in the semiconductor situation helped total passenger vehicle (PV) wholesales to clock an increase of 19.06 per cent year-on-year to 275,788 units in June 2022, from 231,633 units sold in June 2021.

Wholesales of two-wheelers also jumped 23.4 per cent to 1,308,764 units as against 1,060,565 units sold in the corresponding month of 2021 with motorcycle sales up 9.2 per cent to 849,928 units as against 777,169 in June 2021.

Scooter sales soared by 70 per cent at 421,362 units from 247,499 units in the year ago period, as per the Society of Indian Automobile Manufacturers (SIAM) figures released on Wednesday (14 July).

In a forecast that spells a bigger cheer for the industry, Nomura Research expects improving chip supplies to ring in even stronger PV wholesales from July 2022 onwards.

India’s automobile industry benefitted with the government reducing central excise duty on petrol and diesel and changing the duty structure to moderate prices of steel and plastic, according to Rajesh Menon, Director General, SIAM.

In the month gone by, three-wheeler sales increased nearly 184 per cent to 26,701 units as compared with 9,404 units in June last year. The total production of passenger vehicles, three wheelers, two wheelers and quadricycle in June 2022 was 2,081,148 units as compared to 1,698,196 units of vehicles in 2021.

Total sales of passenger vehicles across categories increased 23.7 per cent to 1,611,300 units in June 2022 as against 1,301,602 units in June 2021.

An analysis by Swarajya shows the performance coming amidst a surge in commodity prices since the first quarter of fiscal year 2020-21 like that of cold rolled steel which has seen a 77 per cent increase in prices since Q1 FY2020-21, hot rolled steel with prices up 85 per cent, copper up by 78 per cent, zinc up by 100 per cent and Nickle up 137 per cent since Q1 2020-21.

The industry also put up a robust performance in the first quarter of fiscal year 2022-23 with PV dispatches to dealers surging 41 per cent to 910,431 units, up from 646,272 units in the April-June period of FY2021-22. Two-wheeler dispatches jumped to 37,24,533 units as against 24,13,608 units in the same year-ago period and three-wheeler rose to 76,293 units in Q1FY23 from 24,522 units in the same year-ago period.

Total commercial vehicle wholesales in Q1FY23 registered an increase to 224,512 units against 105,800 units a year ago, taking the total sales across categories to 49,35,870 units in the April-June quarter of FY23 as against 31,90,202 units in the same quarter of the last fiscal.

Another projection of automotive wholesales for June 2022 on yoy basis by Nomura Research pegged PVs dispatches growth by 25 per cent yoy last month, medium and heavy commercial vehicles up136 per cent and two wheelers up 21 per cent.

According to analysts Kapil Singh and Siddhartha Bera, while industry wholesale volumes were largely in line with Nomura estimates for PVs, those for MHCVs were ahead, riding on a strong high-base effect from June 2021 due to the on-going recovery from the second wave of COVID-19.

The PV demand is expected to remain skewed towards new launches in electric vehicles and CNG categories as well as SUVs like Scorpio, Brezza and Hyryder. Mahindra & Mahindra’s ‘Scorpio-N’ promises to disrupt the SUV segment as a global product developed with an overall investment of Rs 1,600 crore which includes setting up a world class highly automated manufacturing line.

The car comes with design, sophisticated ride and handling, thrilling performance, advanced technology and reassuring safety top compete across multiple SUV segments.

In June Maruti Suzuki launched the all new compact SUV Brezza equipped with a bouquet of cutting-edge technologies with new exterior design and superior performance to enhance customer experience. Brezza with 7,50,000 customers, has been consistently been among the top 10 best-selling passenger vehicles.

Nissan Motor India launched the Nissan Magnite RED edition earlier in July 2022 to accelerate the robust demand for the Nissan Magnite SUV which has seen over 1 lakh bookings since launch.

Toyota Kirloskar Motor’s Urban Cruiser Hyryder is the first self-charging hybrid electric SUV and the first of its kind in the B SUV segment in India. The Urban Cruiser Hyryder is capable of running 40 per cent of distance and 60 per cent of time on electric (EV) or zero emission mode.

The car has been packed with features that are being sought by modern urban customers and contributing to the industry’s sales performance with wireless charging, leather seats with ventilation, 360-degree camera and view and a soft touch instrument panel with premium switch.

With such offerings Nomura sees order books being tested with potential rise in discounts in the second half of FY23.

Also Read: India's Inflation Rate May Decline To Around 5 Per Cent By March Next Year: SBI Research Report