Business
Rising Demand, Consumer Confidence Put Auto Sales On Fire In May ‘22
- As per the data released by various manufacturers, Indian passenger vehicle wholesales in the local market demonstrated a robust recovery in May 2022, nearly tripling last month.
Auto sales rise in India. (Unsplash)
Amid rising demand for passenger vehicles and improvement in supply of semiconductors which continue to face a global shortage, Indian passenger vehicle wholesales in the local market demonstrated a robust recovery in May 2022, nearly tripling last month, though on a low base, as per the monthly data of various manufacturers released on Wednesday (1 June).
Dispatches of Hyundai, Kia, Mahindra, Toyota and MotoCorp among others surged weeks after the government cut fuel taxes on 21 May -- leading to an 8 per cent cut in petrol and a 7 per cent cut in diesel prices -- initiatives which Nomura analysts Kapil Singh and Siddhartha Bera believe have been meant to lower the cost of ownership of vehicles and positively benefit demand sentiment.
Hyundai Motor India which registered domestic sales of 42,293 units in May 2022, up from 25,001 units in the same month of 2021, is set to enhance production starting June 2022 to “cater to the high demand for domestic and export markets ensuring timely deliveries of long waiting customers,” the company said on Wednesday.
However, as both HMI plants in Chennai observed the scheduled biannual maintenance shutdown leading to no production for six days in the month (16-21 May), this affected vehicle availability in the month affecting May sales numbers.
Mahindra & Mahindra sold 53,726 vehicles in May 2022, achieving a whopping overall growth of 208 per cent over last year. In Sports Utility Vehicles, Mahindra sold 26,632 vehicles which, according to Veejay Nakra, President, Automotive Division, M&M, sustains the growth momentum with all brands performing well including XUV700 and Thar.
With the local sentiment high on purchases, the company is witnessing strong bookings and has a robust pipeline. “We are closely monitoring the supply chain related issues, which continue to constraint volumes and are taking appropriate actions to mitigate the impact,” says Nakra mirroring the cautious optimism of the industry.
May 2022 also saw Korean car maker, Kia India, retaining its sales momentum with dispatches of 18,718 units in May 2022 as Sonet led overall sales with 7,899 units, followed by Seltos with 5,953 units, Carens with 4,612 units and Carnival with 239 units.
“We are growing at 19 per cent plus, which is higher than the industry average growth rate, even when supply chain issues are plaguing the entire auto industry,” says Hardeep Singh Brar, VP and Head of Sales and Marketing, Kia India.
The May sales figures also include 15 EV6 cars that have been dispatched to dealerships as display. Leveraging the onset of a gradual recovery in the semiconductor shortage issue, the company sold 97,796 units in the first five months of calendar year 2022 while the May performance has taken Kia India past the domestic milestone of 4.5 lakh.
Buoyed by a strong demand factor and positive sentiments in the market Honda Cars India’s domestic sales for May 2022 jumped to 8,188 units, registering a y-o-y growth of 302.9 per cent, compared to its sales in May 2021, when the company dispatched 2,032 units. Honda’s exports grew 418.7 per cent in May 2022 with shipments of 1,997 units compared to 385 units in May last year.
“The prolonged supply chain-related issues still remain a hindrance and we are making all efforts to cater to the demand effectively,” says Yuichi Murata, Director, Marketing and Sales, Honda Cars India which is betting big on its new electric hybrid offering in the mainstream segment, the New City e:HEV after a positive response.
Meanwhile, Tata Motors also continued on a strong trajectory, posting sales of 43,341 passenger vehicles, the highest on record for a month. The sales included 3,454 electric vehicles, also the highest registered by the company in a month. Its sales in the domestic and international market for May 2022 stood at 76,210 vehicles, compared to 26,661 units during May 2021.
Japanese auto major Toyota Kirloskar Motor’s wholesales saw a sharp bounce back with 10,216 units in the month of May 2022, backed by the performance and healthy booking orders of models like Innova Crysta, Fortuner, Camry Hybrid and the Vellfire. In May 2021 TKM had sold 707 units under the impact of the second wave of the pandemic.
Moreover, cumulative wholesales from January to May this year has registered a growth of 16 per cent when compared to the same period last year, thereby witnessing month on month wholesales gravitating back to pre-Covid times in 2019. “Demand continues to peak as we have very encouraging booking orders and enquiries for all our models,” says Atul Sood, Associate Vice President, Sales, and Strategic Marketing, TKM. The company has a production capacity of upto 310,000 units.
In an indication of the continuously improving consumer sentiment benefitting the 2W segment, Hero MotoCorp sold 486,704 units in May 2022 which sequentially, translates into a growth of 16 per cent over the month of April 2022, when the company had sold 418,622 units. Hero MotoCorp had sold 183,044 units in the corresponding month of 2021 when the sales were impacted due to the resurgence in Covid-19 cases and subsequent lockdowns.
“The recent decision of the government to reduce the central excise duty on petrol and diesel has substantially brought down the fuel costs, thereby providing a much-needed relief to motorcycle and scooter users in the country,” says Vikram Kasbekar, Executive Director, Hero MotoCorp. The steps taken to cut duties on iron and steel inputs should help in softening steel prices in the domestic market, adds Kasbekar.
That the beleaguered two-wheeler industry is taking time to recover from the subdued market performance of last year amidst multiple lockdowns is visible in the sales of Honda Motorcycle and Scooter India for the month of May which stood at 353,188 with 320,844 domestic sales and 32,344 exports.
Though the market is gaining back strength as disturbances in terms of supply side subside, coupled with rise in physical presence at office and educational institutions, the sales figures this month remain incomparable from May ’21 as frequent lockdowns in wake of second wave marred the performance during this period last year, says Atsushi Ogata, Managing Director, President and CEO, HMSI.
Introducing ElectionsHQ + 50 Ground Reports Project
The 2024 elections might seem easy to guess, but there are some important questions that shouldn't be missed.
Do freebies still sway voters? Do people prioritise infrastructure when voting? How will Punjab vote?
The answers to these questions provide great insights into where we, as a country, are headed in the years to come.
Swarajya is starting a project with an aim to do 50 solid ground stories and a smart commentary service on WhatsApp, a one-of-a-kind. We'd love your support during this election season.
Click below to contribute.
Latest
