The passenger vehicles segment, comprising cars, SUVs and vans, closed November with sales of more than 310,000 units, making it the sixth straight month with sales crossing the 300,000 mark. December is expected to be yet another month of high sales as the industry works to improve deliveries and reduce the waiting period for cars.
With buoyant November sales, the PV segment of the auto sector is headed towards achieving a record sales of 3.8 million units in 2022 — likely to be best-ever sales in a calendar year. The previous record was 3.38 million clocked in 2018.
The resumption of chip supplies to near normal levels has boosted production, while strong retail demand and new model launches in the SUV segment have helped in the strong growth. Incidentally, there is also a dichotomy of sorts, with sales at the middle and upper end of the price segments picking up, even as sales at the entry level continue to be sluggish. Also, the industry is sitting on estimated pending bookings of around 750,000 units, which is equivalent to more than two months of dealer-end deliveries.
Maruti Suzuki has bookings of an estimated 374,000 units, followed by Mahindra & Mahindra at over 200,000 and Tata Motors with around 150,000.
Maruti Suzuki, the country’s largest carmaker, clocked domestic PV sales of 132,395 units in November, a 21% growth over the same month last year, riding on strong demand for its newly launched SUVs – the new Brezza and the Grand Vitara – as well as for its CNG range.
Tata Motors, the country’s third largest PV maker, saw its volumes rising 55% to 46,037 units during November, compared to the same month last year. Significantly, nearly 10% of the November volumes came from electric vehicles.
Hyundai Motor India, the second largest carmaker in the country, maintained its slight lead over Tata Motors in November, with sales of 48,003 units, a growth of 30% compared to the same month last year.
Utility maker Mahindra & Mahindra held on to its fourth spot in November, with sales of 30,392 units and a growth of 55% compared to the same month last year. M&M has a strong order book for the newly launched Scorpio and the XUV700.
“PV demand normally settles down after the festive season, but this year, we have a very good order book. Interest rate hikes have hardly had any effect on demand,” said Manish Raj Singhania, president, Federation of Automobile Dealers Association.
Maruti Suzuki has said it expects the market to close at 4.1 million units the next year, which would be a growth of 8%. But there could be an impact of the new regulatory changes and general inflationary pressures on demand, that could be potential dampeners.
The pending order booking and new launches are set to sustain demand for sometime, but sales of entry-level cars need to pick up for demand to continue for a longer duration of time. Considering the macro-economic and geopolitical situation, it does not seem to be picking up anytime soon – a concern that Maruti Suzuki Ltd has raised.
“The increase in report rates announced earlier is now being effected in retail financing. In the passenger vehicle segment, about 80% of the sales of all of inventory is financed. We have to closely monitor the demand situation,” said Shashank Srivastava, director (marketing and sales) at Maruti Suzuki. Notably, Maruti is the biggest player in the entry-level car segment in India.