Despite December Growth, Car Sales Behind By Nearly A Decade So Far This Financial Year, Says SIAM
Hyundai Motor Co. vehicles stand on display at a showroom in Delhi. (Photographer: Anindito Mukherjee/Bloomberg)

Despite December Growth, Car Sales Behind By Nearly A Decade So Far This Financial Year, Says SIAM

Factory-gate shipments of cars and utility vehicles rose for the fifth straight month as automakers pushed inventory to dealers anticipating pre-buying ahead of January price hikes across models.

Domestic wholesales of passenger vehicles rose 13.59% year-on-year to 2.52 lakh units in December, according to data released by the Society of Indian Automobile Manufacturers on Thursday.

  • Car sales, which declined in the previous month, rose 8.36% over a year earlier to 1.46 lakh units.

  • Wholesales of utility vehicles jumped 19.75% to 94,787 units—the fifth straight month of pick-up for the segment.

  • The total two-wheeler sales also rose for the fifth straight month in December.

Shipments, however, declined 4.5% over the previous month as the festive season demand waned.

Passenger vehicle and two-wheeler segments have shown some recovery in the third quarter ended December, while commercial vehicle and three-wheeler segments are still in the negative zone, Kenichi Ayukawa, president at SIAM, said on a call with reporters. “[But] If we look at the cumulative numbers of the nine-month period from April to December 2020, it shows that sales of all segments are still behind by many years.”

“Passenger vehicle sales are behind by nearly a decade, while two-wheeler sales are behind by seven years,” Ayukawa said.

We are behind by 10 years in the commercial vehicle segment, and 20 years in three-wheeler segment.
Kenichi Ayukawa, President, SIAM

Last month, Maruti Suzuki India Ltd. and Mahindra & Mahindra Ltd. had said they would increase prices of vehicles from January to offset the adverse impact of rising input costs. That probably would have led companies to anticipate a surge in pre-buying during the month when consumers usually stay away from purchasing new vehicles as new year’s registration date offers a better resale value.

Any recovery is crucial for automakers that were battling a slowdown even before the pandemic struck and witnessed a complete washout in the early part of the Covid-19 lockdown. And while vehicle registrations rose over the year earlier in December, they lagged the pre-Covid levels.

Two-Wheeler

  • Scooter sales rose 5.59% year-on-year to 3.06 lakh units.

  • Motorcycle sales increased 6.65% to 7.44 lakh units.

  • Total two-wheeler sales jumped 7.42% to 11.27 lakh vehicles.

  • Total three-wheeler sales slumped 58.87% to 22,126 units.

Wholesales of commercial vehicles fell 1.12% over the year earlier to 1.93 lakh units in the quarter ended December. (SIAM releases sales data for commercial vehicles quarterly).

“The market situation is dynamic and uncertain. Industry is facing a shortage of semiconductors, steel and shipping containers. There is also an impact of price increase of steel, logistics and other raw materials," Ayukawa said. "The industry is working hard to get back to better volumes and better business health while ensuring safety and well-being of people across the whole value chain."

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