Auto sales jump in June as global semiconductor shortage eases

Auto sales in June advanced for most manufacturers as the global semiconductor shortage, which had been crippling production for a year and a half, is easing. Auto companies in India count dispatches to dealers as sales.

The combined sales at the top eight passenger vehicle makers rose year-on-year by 25 per cent to 292,461 units from 234,025 in the corresponding period last year, shows the monthly sales data released by companies on Friday.

Except the market leader, which had a muted dispatch compared to last year, most saw sales increasing in high double digits.

Analysts expect the good run to continue for passenger vehicle makers because they bring in new models in the run-up to the festive season to make the most of the robust demand. June alone saw three new SUV models -- the new Venue, Scorpio-N, and all new Brezza.

“The supply chain bottlenecks, particularly the semiconductor availability, have improved and it shows in the volumes,” said Hemal Thakkar, director, CRISIL Research.

CRISIL expects the passenger vehicle market to end the year with 14-15 per cent growth year-on-year and surpass the peak FY19 volumes.

Maruti Suzuki dispatched 128,999 units to its dealers in June as against 128,432 units in the same period last year. The shortage of electronic components had a minor impact on production, mainly domestic models.

“The company took all possible measures to minimise the impact,” Maruti Suzuki said in a statement.

Reinforcing the trend of a rapid shift from entry-level small cars to pricier models, sales of the Alto and S-Presso declined year-on-year by 17 per cent during the month. Maruti Suzuki launched the new-generation Brezza on Thursday. It’s the first among the multiple SUV models it plans to launch in its attempt to recoup the ground it has lost to its South Korean and Indian rivals.

Maruti Suzuki has got over 46,000 bookings for the new Brezza since it went on sale.

Thakkar expects the car segment, particularly the entry-level ones, to remain under pressure amid the inflationary trend, rising fuel prices, and the shift in buyer preferences.

“I won’t be surprised if the segment ends the year with a decline,” he said.

Riding on the new Venue, the subcompact SUV, sales at Hyundai Motor India increased 21 per cent year-on-year to 49,001 units. Hyundai has got over 30,000 bookings for the new model since it went on sale on June 16.

“With the semiconductor situation showing signs of easing, sales have again started showing a positive trend. Further, the newly launched Hyundai Venue has created excitement in the market space and has been receiving tremendous customer response,” said Tarun Garg, director (sales, marketing and service), Hyundai Motor India, in a statement.

Meanwhile, continuing to cement its position in the passenger vehicle market, Tata Motors saw its sales jump 87 per cent to 45,197 units. It was a month of record sales for Kia Motor India. The local arm of Hyundai sold 24,024 units in June, up 60 per cent year-on-year.

Mahindra and Mahindra (M&M), which faced a severe shortage of chips till a few months ago, too saw its sales grow at a fast pace during the month at 26,880 units, up 59 per cent year-on-year. The company launched the Scorpio-N on June 27, and this is expected to help it regain share in the SUV market and capitalise on the demand. The model will be put on the market in the festive season.

“We had a blockbuster launch of the Scorpio-N and it has generated a tremendous buzz and anticipation. The supply chain situation continues to remain dynamic; we are monitoring the situation closely,” said Veejay Nakra, president, automotive division, M&M in a statement.

Meanwhile, sales at Skoda Auto also hit a record high — 6,023 units in June against 734 units a year ago, as the company reaped the benefits of the new launches.

Zac Hollis, brand director of Skoda Auto India, attributed the brisk volume to the popularity of launches like the Slavia and Kushaq, coupled with the revamp of its after-sales strategy

“Our dealerships in Tier 2 and Tier 3 cities are registering record sales, which means that our products are becoming popular across geographies. While we are identified as a premium brand Skoda is no longer identified as a luxury brand. The integration of dealerships with service centres has helped to bring after-sales closer to the customer,” Hollis told Business Standard.

With contributions from Arindam Majumder