Automakers on course to sell record 1 million vehicles this quarter

Record sales this quarter are expected to push up the volume for calendar year 2022 by nearly half a million units over initial projections, which were already for all-time high volumes. Sales of cars, utility vehicles and vans this calendar year are now expected to close around 3.85-3.90 million units, up 25-27% over last year.

As many as 6,71,000 passenger vehicles have already been sold in the first two months of this quarter. With an improvement in component supplies, dispatches are expected to be 3,25,000-3,35,000 units this month, enabling wholesales to breach the 1-million-mark for the first time ever in a quarter.

Festive sales are also expected to set new records, said industry executives. The previous peak for a quarter was 9,33,000 units, recorded in the January-March quarter of 2021. All-time-high sales for a year were recorded in 2018 at 3.39 million passenger vehicles. These are dispatches from factories to dealers, as automakers in India do not report retail sales to customers.

A shortage of parts, especially semiconductors that are a key component in modern vehicles, had forced automakers to cut down production in much of last year and early this year, stretching the waiting period for customers to several months. Improving availability of parts has now helped them ramp up production and hasten deliveries to customers. Market leader Maruti Suzuki said it was currently utilising 94-95% of its available capacity to build stocks for deliveries in the upcoming festivals of Navratri and Diwali.

Shashank Srivastava, senior executive director (marketing and sales) at Maruti Suzuki, told ET that the company had pending orders of 417,000 units, with as much as 40% of these coming in for SUVs – the newly launched Brezza and the soon-to-be-launched Grand Vitara.

“Demand remains strong. Festive sales should be good this year if automakers can produce vehicles in line with customer demand patterns,” said Srivastava.

Broadly, with the company slated to launch a couple of more models in the space, Maruti Suzuki aims to regain a 50% share in the local passenger vehicle market in the mid-term, he said.

“The passenger vehicle segment is set to record best-ever car sales in a decade this festive period,” said Manish Raj Singhania, president of the Federation of Automobile Dealers Associations. Demand momentum in the market remains strong across categories except at the entry level, he said.

While the supply side is improving, a slew of new launches – Maruti Suzuki’s Brezza and Grand Vitara; Toyota’s Hyryder, Venue and Tucson from Hyundai; the Tata Punch and Mahindra & Mahindra’s XUV700 and Scorpio – is keeping consumer interest strong.

Consultancy firm S&P Global Mobility has already revised thrice its forecast for India’s 2022 light vehicle sales growth (including small commercial vehicles of up to five tonnes), from 6% at the beginning of the year to 20% at present.

Gaurav Vangaal, associate director, light vehicle production forecasting at S&P Global Mobility, said: “Given the strong demand in the marketplace, there is a strong potential that the output for light vehicles in India could breach the 5-million-mark for the first time with the supply chain improving, especially on the semiconductor.”

A healthy monsoon is likely to offer heft to the rural growth story and that may also provide traction to the under Rs 10 lakh vehicle market, which has remained under pressure after multiple waves of Covid, said experts.