Industry

‘Auto sales growth is healthy, but chip shortage is a worry’

A majority of vehicle manufacturers posted strong growth in wholesales during August, and are betting on the festival season to help spur sales further. However, the shortage of semiconductors continues to impact production even as customer sentiment remains positive, they cautioned.

Maruti Suzuki said its domestic passenger vehicle (PV) sales rose to 1.13 lakh units, from 1.03 lakh a year earlier. Total sales, however, fell 4.6% at 1.30 lakh units due to a fall in exports.

“Sales volume of the company in August 2021 was affected due to electronic components shortage,” Maruti said. Hyundai Motor India saw domestic sales rise 2.3% to 46,866 units and exports climbing 79% to 12,202.

Tata Motors said its domestic PV sales rose 51% to 28,018 units. However, sales declined 7% month-on-month from 30,185 units in July. Domestic commercial vehicle (CV) sales also grew 55% to 26,172 units.

The semiconductor shortage continues to impact the auto industry globally and recent lockdowns in East Asia have aggravated the supply situation. Tata Motors is hence ‘forced to moderate production and offtake volumes’ in the coming months, the company said in a statement.

“The situation is fluid and we will continue to work to mitigate the impact of this and aim to meet our customer orders... the order book is strong,” it added.

For Mahindra & Mahindra (M&M), PV sales increased 17% to 15,973 vehicles from a year earlier. However, commercial vehicle sales fell about 27% to 11,438 units.

“Supply of semiconductors continues to be a global issue for the auto industry and has been a major area of focus for us.” M&M’s tractor sales fell 15% to 19,997 units “due to high base effect”. Hemant Sikka, president — Farm Equipment Sector, said, “With the festive period on the anvil, which also coincides with the harvesting season, we are anticipating robust demand in the coming months.”

Two-wheeler sales dip

Honda Cars India sold 11,177 units in August against 7,509 units a year earlier. Rajesh Goel, senior VP and director, Marketing & Sales, said, “While we are quite optimistic on demand side going forward, we are carefully monitoring the prevailing supply side issues affecting the industry and any future COVID related disruptions.”

Kia India sold 16,750 units in August. Tae-Jin Park, executive director and chief sales and business strategy officer, Kia India said, “In CY2021, we have sold almost 1.3 lakh vehicles till now, with an average of over 16,000 vehicles per month. With the festive season around the corner, we are anticipating a further rise in this number. To cater to the pent-up and upcoming demand for our vehicles, we are taking appropriate measures to enhance production output.”

Nissan India too saw strong growth in domestic sales with 3,209 vehicle dispatches. “With the start of the festive season, customer sentiments are positive with increasing inflow of bookings; the challenge is on the supply side with shortages and increased lead time for semiconductors supply impacting the availability of vehicles. We foresee this challenge [may] continue during the coming months,” said Rakesh Srivastava, MD, Nissan Motor India Ltd.

In two-wheelers, market leader Hero MotoCorp saw domestic sales dip 24% to 4.31 lakh units. Honda Motorcycles and Scooters India saw domestic sales slip 6% to about four lakh units.

Suzuki Motorcycle India said it sold 61,809 units in the domestic market as compared to 53,142 units in August 2020, while Bajaj Auto saw a decline of 11% in domestic sales of two-wheelers to 1.58 lakh units.

TVS Motor said the domestic two-wheeler business registered sales of almost 1.8 lakh units compared with 2.18 lakh units a year earlier. “With pandemic restrictions easing and the festive season approaching, we expect the retails to improve significantly in the coming months,” it said.

For Ashok Leyland, domestic sales grew 44% to 8,400 units. Bajaj Auto’s CVs rose 91% to 14,624 units.


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Printable version | Oct 29, 2021 2:40:03 AM | https://www.thehindu.com/business/Industry/auto-sales-growth-is-healthy-but-chip-shortage-is-a-worry/article36237465.ece

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