Passenger vehicle sales in the domestic market rebounded in June after the state governments lifted restrictions imposed during the second wave of COVID-19.
Moreover, carmakers such as Maruti Suzuki, Hyundai, Tata Motors, Kia and M&M had long-pending orders of their popular models until the first week of April 2021, which were fulfilled last month. Popular models such as Maruti Baleno and Swift, Hyundai Creta, Tata Altroz, Mahindra Thar, and Kia Seltos have waiting periods ranging from two to ten months.
According to the sales data released by the individual companies and industry estimates, passenger vehicle sales doubled in June 2021 at 255,674 units on a low base. Last year, the segment sold 116,928 units in June 2020.
Notably, these numbers have been achieved with 80-90% of the overall car market that has opened up; a few states in the Southern region continue to have restrictions in some districts.
Industry experts whom Mobility Outlook spoke to indicated that passenger vehicles are the only segment among all categories which started showing green shoots after the last year lockdown as the fear of the virus led people to think about personal mobility. Moreover, carmakers also launched popular models such Hyundai Creta, Nissan Magnite, Renault Kiger and Mahindra Thar throughout the year, which continued to create excitement in the market.
Other than this, strong rural growth fundamentals continue to uplift sales of small cars and rural bound models like Bolero, Brezza and Scorpio.
Saket Mehra, Partner, Grant Thornton India, said, 'Just like last year, we are experiencing revenge shopping, post lifting of lockdown across retail, white goods and vehicles. Positive June sales for PV's are largely attributed to recovery due to easing lockdown restrictions across the country. The month on month rebound has been in both PV and 2W. Forthcoming launches in the UV segment along with the ongoing vaccination drive will further boost the demand till festive season,' he added.
However, Mehra is wary about how rural demand will contribute this year because of a moderate increase in benchmark prices of certain Kharif crops and increased outbreak of the virus in rural areas leaving low or no disposable income for discretionary purchases.
In terms of production, the experience of the first wave is helping the industry. As a result, carmakers are better equipped and confident in managing pent-up demand, inventory, supply forecasts and looking forward to regaining lost volumes in the upcoming festive season, pointed out Gaurav Vangaal, Associate Director, IHS Markit.
He further added, 'Uncertainty is there due to high steel prices, increased crude oil prices and semiconductor shortage impact. But the automotive market is moving towards positive sentiments.'
The largest car manufacturer, Maruti Suzuki, almost tripled its sales to 124,280 units in June 2021 compared to 51,274 units in the same month last year. Nearly 54% of sales contribution came from compact cars such as WagonR, Swift, Celerio, Ignis, Baleno and Dzire, indicating the need for personal mobility among buyers. The company sold a total of 68,849 compact cars.
Similarly, South Korean Carmaker Hyundai Motor India, which is currently beefing up its SUV portfolio, recorded 90% growth in June 2021 at 40,496 units.
Tarun Garg, Director (Sales, Marketing & Service), Hyundai Motor India, said that markets opening up and improving customer sentiments have led to the growth in the month in June.
Home-grown carmakers, Tata Motors and Mahindra & Mahindra ended June on a high note.
Tata Motors is marching strong with its newly launched Safari and also Altroz and Nexon. It sold 24,111 units in June 2021.
Shailesh Chandra, President, Passenger Vehicles Business Unit, Tata Motors, said that June '21 sales stood at 24,110 units, posting strong 3-digit growth of 111% versus June '20. The company continues to see strong customer interest in its product offerings, resulting in a strong order book, and 'we aim to fulfil those to the best of our abilities in this supply-constrained environment.'
'PV industry continues to witness uncertainty on account of global semiconductor shortage and rising commodity prices, while the demand side is on a progressive recovery path,' he added.
Mahindra and Mahindra, on the other hand, recorded a domestic sale of 16,913 units in June 2021.
Veejay Nakra, Chief Executive Officer, Automotive Division, M&M, said, 'We are seeing a boost in demand in both urban and rural areas, and we expect the upward trend in demand to continue across all segments and markets.'
'As we come out of the second wave of the pandemic, by and large, our supply chain has stabilised except for the global semiconductor issue, which still continues to be a challenge that we are addressing as a top priority,' he added.
Kia Motors recorded sales of 15,015 units in June 2021, registering over 106% Y-o-Y growth. The brand sold 8,549 units of Seltos, 5,963 units of Sonet and 503 units Carnival.
Tae-Jin Park, Chief Sales and Business Strategy Officer, Kia India, said, 'The last few weeks have shown signs of improved customer sentiment, and we continue to be optimistic about the future. We, however, remain cognizant of the ongoing situation and are reviewing our operations week-on-week, evaluating measures to meet the demand for our vehicles.'
Apart from the top five carmakers, most other car OEMs witnessed a strong rebound except Volkswagen and Skoda. Volkswagen record a single-digit growth of 8% at 1,633 units, and Skoda Auto India saw a decline of 7% at 734 units.