passenger vehicles: Sales of passenger vehicles declines 41% in September

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Sales of passenger vehicles declined 41% to around 160,070 units last month as the shortage of semi-conductors disrupted production operations at several leading manufacturers including market leader .

The decline would have been less at around 37% if we were to include the sales of Tata Motors, which has stopped reporting data on a monthly basis to SIAM. As many as 293,226 passenger vehicles were sold in Sep 2020 and 260,242 units in Aug 2021.

Automakers in India report wholesale dispatches from factories and not retail sales to customers.

Even though customer demand during the month remained strong on back of increased preference for personal mobility, vehicle makers faced challenges dispatching vehicles ahead of the key festivals of Navratri and Diwali as the shortage of chips adversely impacted production, said senior company officials. The industry is currently on pending orders of over half a million units.

In the two-wheeler segment too, sales declined 17% to 1,528,472 units in September as the economic damage caused by the second wave of the pandemic kept away consumers in the entry-level motorcycle segment, especially in rural markets. While sales of motorcycles fell 23% to 948,161 units, those of scooters dropped 7% to 517,239 units. Three-wheeler sales though rose 54% to 29,185 units, albeit on a low base.

Kenichi Ayukawa, President, SIAM said, “Indian automobile industry continues to face new challenges. While on one hand, we are seeing a revival in vehicle demand, on the other hand, shortage of semi-conductor chips is causing a major concern for the industry. Many members have curtailed their production plans.” Coupled with the festive season demand, this disruption in production has led to long waiting time for customers on popular models of some segments.

High raw material prices also continue to be a challenge. The industry is taking all possible measures to mitigate the impact of such supply chain issues and optimize production, added Ayukawa.

“On the sales front, barring the Covid period, H1 sales of passenger vehicles are still below 2016-17 levels, that of two-wheelers are below 2011-12 levels, that of commercial vehicles are below 2010-11 levels and that of three-wheelers are still below 2000-01 levels”, said Rajesh Menon, Director General, SIAM.

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