March auto sales throw up a mixed bag for the industry

Maruti, Hyundai report decline in sales, Tata Motors records highest-ever monthly numbers

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’.