March turned out to be a mixed bag for the automobile industry in India as shortage of electronic components continued to impact auto production in the country. While manufacturers such as Maruti Suzuki and Hyundai Motors posted a decline in wholesales, others such as Tata Motors, Skoda and Kia recorded their highest ever monthly wholesales.
Market leader Maruti Suzuki said it sold 8% fewer units at 1,37,658 last month in the domestic market compared with a year earlier. Full-year local sales rose 3% to 13,65,370 units . “The shortage of electronic components had some impact on the production of vehicles in FY 2021-22,. the company said in a statement. “The company took all possible measures to minimise the impact. As the supply situation of electronic components continues to be unpredictable, it might have some impact on the production volume in FY 2022-23 as well,” it added.
The company, however, exported 2,38,376 units in FY22 - the highest in any financial year. Hisashi Takeuchi, who took over as the MD and CEO on Friday said, “These export numbers are a reflection of India’s manufacturing potential and the acceptance of India-manufactured vehicles, all over the world.”
Rohan Kanwar Gupta, VP and sector head - Corporate Ratings, ICRA, said that wholesale dispatches of passenger vehicles had risen over the past few months, aided by an improvement in semiconductor supplies. “In March 2022, domestic wholesale volumes at [about] 3.2 Lakh units represented [about] 6% growth on a sequential basis and only a marginal 0.4% decline on YoY basis,” Mr. Gupta said, adding that aided by improved production, retail sales had also improved over the recent past; in March 2022, retail sales at 3.2 lakh units represented only an about 6% decline on a YoY basis.
“The ongoing crisis with regard to Russia and Ukraine could, however, impact semiconductor chip production, as Russia and Ukraine are both suppliers of raw materials used in semiconductor manufacturing, and remains a monitorable. The impact of the crisis in the form of higher fuel and commodity prices also poses a risk to demand prospects, in case it materialises into a long-drawn out war,” he added.
Hyundai Motor India sold 44,600 units in the domestic market, while exporting 10,687 units in March 2022. For the full fiscal, the company posted a growth of 2% in domestic sales to 4,71,535 units.
Homegrown Mahindra & Mahindra’s passenger vehicle wholesales grew 65% in March to 27,603 units, and 44% to 2,25,895 for the full fiscal. Automotive Division CEO Veejay Nakra said demand continued to be strong, even as the company remained ‘watchful of the global supply chain’.
Tata Motors sold a total of 6,92,554 units in domestic market in the full fiscal, higher by 49% year-on-year, while recording 30% growth to 86,718 units in March. Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Ltd. and Tata Passenger Electric Mobility Ltd. said, “Tata Motors set several new records in a challenging year, disrupted by two waves of COVID, semiconductor crisis and steep increase in commodity prices. We posted the highest ever annual, quarterly and monthly sales, supported by a strong demand for our New Forever range and agile actions taken on the supply side.” He said the company recorded the highest ever annual passenger vehicle (PV) sales of 3,70,372 units, registering a growth of 67% over the previous fiscal.
“Tata Motors’ commercial vehicle domestic sales in Q4 at 1,10,027 units was [about] 21% higher than the previous quarter and 12% higher than the same quarter last year (Q4 FY21)...Early signs of recovery were seen in otherwise worst impacted CV passenger segment...We are cautiously optimistic about domestic MHCV & ILCV demand while keeping a close watch on geopolitical developments, fuel inflation and semiconductor shortage.”
Meanwhile, Honda Cars India said it recorded annual sales growth of 4.3% to 85,609 units in FY22. Domestic sales for March were lower at 6,589 units compared with 7,103 units a year earlier. Yuichi Murata, director, Marketing and Sales, said: “The last fiscal year has been a mixed bag for the industry. Every quarter was punctuated with multiple challenges - from the pandemic to paucity, hike in raw material pricing and chip shortage. The industry, however, showed resilience and succeeded in restoring positivity in the market."
He added, “We weren't isolated from these challenges and did feel the impact of the chip shortage. With the market situation returning to normalcy after an extended tough period, the current situation looks stable, paving way for growth in future. We are entering this financial year with renewed energy and enthusiasm.”
Toyota Kirloskar Motor said it dispatched 17,131 units during March, its highest-ever domestic sales in a single month in the last five years. For the full year, the company registered 58% growth selling wholesales of 1,23,770 units
Nissan Motor India too witnessed 100% y-o-y growth with wholesales of 37,678 units FY21, and 3,007 units in March 2022. Managing Director Rakesh Srivastava said: “FY21 for Nissan India has been a year of turnaround with volume growth of 100% in domestic in an industry growth of 13%, despite the headwind challenges of COVID-19 and semiconductor-related supply shortages.
Skoda Auto India clocked its highest ever sales volume of 5,608 units in March. The previous high for the company was 4,923 cars sold in June 2012. Zac Hollis, brand director, said, “The concerted efforts of the entire team to ensure the successful roll-out of the India 2.0 project is bearing fruit... Despite the foreseeable challenges impacting market sentiment in the short term, we are confident that 2022 will be the biggest ever year for us in India.”
Kia India too recorded its highest-ever domestic sales at 22,622 unit sales in March. For the full year, the company sold 1,86,787 units.
MG Motors said it retailed 14.5% fewer units at 4,721 in March.
