November continued to be a good month for the passenger vehicle industry and it now looks as if the dark days following the pandemic are hopefully a thing of the past.
Today, going by the numbers, it is more than evident that there has been a positive sentiment right across the automotive ecosystem. With easier availability of semiconductors, customers are getting their preferred models a lot quicker and manufacturers in turn are hoping to clear the order backlog faster too.
Market leader, Maruti Suzuki India, posted a healthy growth of 21% with retails of 132,395 units in November, up from 109,726 units in the same period last year. The company has reasons to be extra pleased thanks to tremendous customer response to the new Brezza and the Grand Vitara.
Maruti’s closest rival over the decades, Hyundai Motor India, also did well with 29.7% growth in retails at 48,003 units. Group company, Kia India, did as well with 69% growth in domestic retails translating into 24,025 units.
Tata Motors, which has been firing on all cylinders for some months now and clearly aiming for Hyundai’s place in the Number 2 spot, grew 55% with domestic sales totalling 46,037 units in November, up from 29,778 units in the corresponding month last year. Mahindra & Mahindra, which has also regained its mojo in the SUV space, sold 30,392 vehicles, a 56.1% increase over 19,458 units sold in November 2021.
MG Motor India reported sales of 4079 units, up 64.4% from 2,481 units in the same period last year. Skoda Auto, likewise, saw a jump of 102% to 4,433 units, compared to 2,196 units which clearly shows that the India 2.0 initiative of the Volkswagen group is yielding the desired results. Skoda is lead managing the alliance and its Kushaq and Slavia are bringing in the numbers along with VW’s Taigun and Virtus, which are developed on the same platform.
Honda Cars India, which has faced serious headwinds over the last few years, showed a 29% growth in sales at 7,051 units as against 5,457 units last year. Its Japanese counterpart, Nissan India, had a different story to narrate with a fall of 9.46% to 2,400 units from 2,651 units in November ’21.
Toyota Kirloskar Motor, likewise, was down 9.5% to 11,765 units from 13,003 units in the same time last year. The company will hope for a turnaround with the recent unveiling of the Innova HyCross, whose price will be announced in January 2023. Toyota will also be looking to build its alliance with Suzuki in India which, in turn, could only consolidate its hold in the market.
Puneet Gupta, Director, IHSMarkit, said, “The problem with Toyota currently is that they are now facing a dual complexion scenario. On one side their supply chain is not yet back on track, while on the other hand, their complete portfolio is in huge demand, which the brand has never catered to in the Indian market.” Gupta believes that TKM will soon be able to manage its product demand as they are getting a lot of inputs from their alliance partner, Maruti Suzuki.
2Ws Back On Track?
The two-wheeler segment has been facing a rough run in the entry-level space, where it is now amply clear that rural India has not got back on its feet after the pandemic and the economic woes that followed.
There have been contrarian views on this subject with a section of observers insisting that the bad times are now a thing of the past but clearly food inflation and high fuel prices are doing little to boost buying sentiment in the entry-level 100 cc space.
With this reality in the backdrop, Honda Motorcycle & Scooter India (HMSI) posted domestic sales of 353,540 units in the month, which reflected a 38% jump from 256,174 units last year. The company has been in the news for its seesaw battle with former ally, Hero MotoCorp, which retailed 390,932 2W units in November 2022, a growth of 12% over the corresponding month of the previous year, when the company had sold 349,393 units.
Hero MotoCorp, in fact, expects the momentum to build-up in the coming quarters on account of favourable economic indicators, including encouraging farm activity and positive consumer sentiments along with upcoming marriage season.
TVS Motor Company’s domestic sales grew 9% to 191,730 units in November from 175,940 units in the same period last year. While its motorcycles and scooters have been showing reasonable growth, the company also reported that its iQube electric scooter registered sales of 10,056 units in November 2022, compared to a mere 699 units in the same period last year.
TVS Motor has been constantly reiterating its commitment to electric mobility and the following months will see interesting dynamics panning out in this space, especially with the BMW Motorrad alliance promising plenty.
Bajaj Auto’s domestic motorcycle sales were down 15% to 123,490 units from 144,953 units in November 2021. The company’s exports, which account for over 40% of its business, also saw a decline from 193,520 units last year to 138,630 units in November ’22.
Royal Enfield posted sales of 65,760 motorcycles, as against 44,830 units in the same month last year, a growth of 47%. The company is receiving very good response to its recently launched Hunter motorcycle and will hope to ride on this momentum in the coming months too. Suzuki Motorcycle India recorded domestic sales of 63,156 units, a 13.4% YoY growth from November 2021.
EVs’ Growing Impact
Meanwhile, in the electric space, Ather Energy sold 7,234 units in November ’22, up 260% year-on-year. Joy-E-Bike, on the other hand posted retails of 7,123 units, which includes 3,290 units of its high speed e2W leading to a YoY growth of 116% in November 2022.
This segment has now got a whole lot of new players with Ola Electric arguably among the high profile brands to throw down the gauntlet to existing players like Hero Electric, Okinawa, Ampere and a host of others. Traditional players like Hero, Bajaj and TVS are also revving up their presence in the electric segment and the tug-of-war will be interesting to watch in the coming months.
A report from the Society of Manufacturers of Electric Vehicles (SMEV) states that the electric two-wheeler sales trend remained steady in November, reaching a total of 76,162 units compared to 76,952 units in October, as per the VAHAN portal.
In the current fiscal, the E2W industry has clocked around 4.3 lakh units till November and with four months to go before the fiscal draws to a close, total annual volumes may fall short by more than 20% of the one million unit mark projected both by NITI Aayog and SMEV.
A spokesperson from SMEV said that the growth momentum in the electric two-wheeler industry has been positive in the last few months even while it may miss the annual target.
“Hence, it is important to address issues such as kinks in the incentive scheme and the timely formulation of a mid-term and long-term policy post the FAME 2, to support the ambitious plans of at least 25% to 30% conversion of two-wheelers into electric by FY25,” a spokesperson from SMEV added.
Continuing its fall for the second consecutive month, Tata Motors’ commercial vehicle numbers were down 3% in November 2022 with retails of 27,430 units as compared to 28,295 units last year.
M&M posted retail sales of 19,591 units, a 30.7% growth over November ’21. The company’s three-wheeled segment was up 103% to 5,198 units from 2,564 units sold in November ’21.
VE Commercial Vehicles, the joint venture of Volvo and Eicher, recorded sales of 4,903 units, including 4,720 units of Eicher brand and 183 units of Volvo brand, as against 4,085 units sold in November 2021, a growth of 20%.
Gupta believes that as supply comes back on track, it will be the low volume PV players that will face the brunt of the pressure, as consumers shift back to more popular PV models. To get around this, players like Nissan and Renault will have to look at Tier I/II cities and offer products at steep discounts in order to recoup the high demand.
Gupta believes top PV players would need to employ aggressive marketing tactics over the next three to four months to attract customers to their showrooms. To stay relevant and new in the market, these strategies may include offering steep discounts or even introducing minor changes. “This is where the product will truly reign,” he predicted.
He added that the problem will be exacerbated for the SUV segment, as the majority of PVs introduced in the last few years have been SUVs, and there is a high demand for the vehicle type, ranging from INR 6-30 lakh.