Pick Up In Auto Sales Continues Even As SIAM Reiterates Uncertainty

Domestic wholesales of passenger vehicles rose 3.39% month-on-month to 2.90 lakh units in March.

Car models are displayed in the showroom (Photographer Dario Pignatelli /Bloomberg)
Car models are displayed in the showroom (Photographer Dario Pignatelli /Bloomberg)

Factory-gate shipments of passenger vehicles rose over the preceding month, aided by healthy demand for utility vehicles even as supply-side constraints persist.

Domestic wholesales of passenger vehicles rose 3.39% month-on-month to 2.90 lakh units in March, according to data released by the Society of Indian Automobile Manufacturers on Monday. That’s the third straight month of such an increase in sales.

Volumes, however, are not comparable year-on-year because of the low base on account of the Covid-19 pandemic and transition to Bharat Stage-VI emission norms. The automakers had sold 80,727 units in March 2020.

Sales highlights for March (month-on-month)

  • Car sales rose 1.15% to 1.56 lakh units.
  • Wholesales of utility vehicles jumped 7% to 1.22 lakh units.
  • Scooter sales fell 1.52% to 4.57 lakh units.
  • Motorcycle sales increased 9.19% to 9.93 lakh units.
  • Total two-wheeler sales, too, increased 4.09% to 14.96 lakh units.
  • Three-wheeler sales rose 16.82% to 31,930 units

Around this time last year, auto and component makers—together contributing more than 7% to the nation’s GDP—had begun facing supply chain disruptions due to the pandemic, along with pressures of transition to Bharat Stage-VI emission standards, worsening the already slowing sales.

While the lifting of the lockdown offered hopes to automakers as they scaled up production to cater to an increase in demand for personal mobility and make up for the washout during the initial months of the stay-at-home curbs, a global shortage of microprocessors—the brains of electronic components used to control everything from anti-lock braking to airflow systems of cars—is making a quick ramp.

“A deep structural slowdown in the industry even before the pandemic, combined with the impact of Covid-19 in 2020-21, has pushed all vehicle segments back by many years,” Kenichi Ayukawa, president at SIAM, said in a statement. The recovery from here, according to Ayukawa, will require time and effort by all stakeholders. “There is uncertainty in the value chain owing to semiconductors, lockdowns and raw material.”

In the fiscal ended March 2021, passenger vehicle sales fell 2.24% to 27.1 lakh units.

Sales highlights in FY21

  • Passenger cars: down 9.06% to 15.41 lakh units.
  • Utility vehicles: up 12.13% to 10.61 lakh units.
  • Two-wheelers: down 13.19% to 1.51 crore units.
  • Three-wheelers: down 66% to 2.16 lakh units.
  • Commercial vehicles: down 20.77% to 5.69 lakh units.
Pandemic Knocks Auto Industry Sales By A Third