Carmakers brave a tough FY22 to sell 3.1 m units

Carmakers sold 3.1 million units in the country in the year ended March, a 13% improvement over the lows of the preceding fiscal, despite the industry failing to keep up with consumer demand amid a global shortage of semiconductors.

Multiple automakers including Tata Motors, Kia and Skoda recorded some of their best annual sales numbers last year although overall industry sales trailed the peak sales of 3.3 million units recorded in FY19.

“We are seeing very good demand side parameters in terms of inquiries and bookings. But due to supply-side issues, a lot of bookings have turned pending,” Shashank Srivastava, executive director at Maruti Suzuki, told ET. The market leader was sitting on 270,000 pending bookings, more than twice the usual, he said.

Maruti Suzuki sold just over 1.3 million units in FY22, and its market share dipped to 43.4% from more than 50% in previous years. The company was impacted due to its relative lack of products in the fast-growing sports utility vehicle (SUV) segment.

Sales of small, entry-level cars, which form a bulk of Maruti Suzuki’s sales, were also disproportionally impacted by price hikes and high fuel prices. Petrol now costs more than ₹100 a litre in most cities, hurting consumer sentiment and their willingness to buy new vehicles.

Selling over 370,000 units, Tata Motors recorded its highest annual sales yet in FY22, riding on the success of its new product portfolio. It regained its place as the third-largest automaker with an improved market share of 12%.

Sales of commercial vehicles by leading four players – Tata Motors, Ashok Leyland, Eicher Motors and Mahindra – improved 27.4% year on year on a low base to 664,009 units in FY22. These include trucks, buses and small CVs.

The improvement came on the back of increased activity in road construction, mining and improved infrastructure spending by the central and state governments, said Girish Wagh, executive director at Tata Motors. “We are cautiously optimistic about domestic MHCV (medium and heavy commercial vehicles) and ILCV (intermediate and light CVs) demand while keeping a close watch on geopolitical developments, fuel inflation and semiconductor shortage,” he said.

Carmakers Brave a Tough FY22 to Sell 3.1 m Units

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