Passenger Vehicle Sales Surge as Chip Woes Ease

Passenger vehicle sales last month increased in double digits, as easing constraints on component supplies allowed manufacturers to step up production of cars and utility vehicles even as their order backlog continued to swell.

As per data available with industry body Society of Indian Automobile Manufacturers, 293,865 passenger vehicles were sold last month, marking an increase of 11% compared with a year earlier. The growth would be even higher at 16% (341,370 units) if the volume of Tata Motors too is included. The manufacturer of the Tata Harrier SUV, which dispatched 47,505 units in July, has stopped reporting monthly numbers to SIAM. PV sales had previously peaked at 334,000 units, including of Tata Motors, in October 2020.

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

Senior industry executives are upbeat about the growth prospects in the passenger vehicle segment in the upcoming festive period and are working overtime to build inventory to hasten deliveries.

In the two-wheeler segment, sales rose 10% to 1,381,303 units, albeit on a low base. While sales of motorcycles increased 4% to 870,028 units, those of scooters went up 28% to 479,159 units. Weak consumer sentiment at the lower end of the market, however, kept the industry worries.

Three-wheeler sales grew 73% to 31,324 units in the past month from a year earlier. Sales of two-wheelers last month were below the July 2016 numbers, and those of three-wheelers less than the volume in July 2006, said SIAM.

The country’s largest two-wheeler maker, Hero MotoCorp, expects normal monsoon in most parts of the country, the consequent agricultural harvest along with the upcoming festive season to keep the sentiment positive and help build the momentum going ahead. Ravi Bhatia, president at automotive consultancy firm Jato Dynamics, said while improved supplies of semiconductors, restocking of dealers, large order backlog and resilient customer spending would boost growth in the passenger vehicle segment, risks remained due to macroeconomic challenges.

Sales across the various categories (passenger vehicles, two-wheelers and three-wheelers) rose as much as 11% to about 1,706,545 units in July.

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