Auto sales show positive trends in July as global chip headwinds ease

Auto sales -- a key barometer of the economy -- showed positive trends in July, signalling that companies have mitigated the production hurdle caused by semiconductor shortage. But industry executives warned that this improvement could be impacted by any hike in interest rates and commodity price inflation.

The country’s largest carmaker, Maruti Suzuki, recorded sales of 175,916 units in July 2022, an increase of 8.28 per cent over July 2021.

The company's sales were driven mainly by compact cars, including the Baleno, Celerio, Dzire, Ignis, Swift, Tour S, and WagonR. Sales of these rose to 84,818 units in July 2022, from 70,268 units a year ago.

Sales of mini cars -- comprising Alto and S-Presso -- were 20,333 units last month, up from 19,685 units in July 2021. However, sales of utility vehicles -- including Brezza, Ertiga, S-Cross, and XL6 – came in lower at 23,272 units, against 32,272 units a year ago.

Shashank Srivastava, senior executive director (marketing and sales), Maruti Suzuki, said though production has significantly improved because of a better supply of semiconductors, pending bookings are still high. Maruti alone has a pending order book of around 335,000 units.

“Though the booking trend looks encouraging now, it will depend on what position the central bank (the Reserve Bank of India) takes on rate hikes. As of now, the hike in key interest rates had a little impact, with retail sales showing slight ‘de-growth’,” he said.

Mumbai-based Tata Motors sales showed the sharpest year-on-year (YoY) increase -- a jump of 52 per cent to 81,790 units in July 2022; the figure was 54,119 units in July 2021. While total domestic commercial vehicle sales rose 44 per cent YoY to 31,473 units, sales of passenger vehicles jumped 57 per cent to 47,505 units in July 2022.

The company’s sales were driven by the Nexon compact SUV, which has been its best-selling model and also among the top five selling models in recent months in the entire industry. Besides the Nexon, the Punch and the Altroz are also registering good volume tally on a consistent basis in the domestic market.

Hyundai reported sales of 50,500 units in the domestic market (up 5.1 per cent YoY), against 48,042 units a year ago. Its exports came in at 13,351 units, up 9.4 per cent YoY from 12,207 units. Total sales came in at 63,851 units -- 6 per cent higher YoY.

Tarun Garg, director (sales, marketing & service), Hyundai Motor India said: “With the improvement in the semiconductor situation, the passenger vehicle segment is showing positive trends, riding on the green shoots of pent-up demand and customer desire towards personal mobility. Further, the newly launched Hyundai Tucson has built strong momentum ahead of the festive season and received an overwhelming customer response. We remain optimistic towards the prospects of the Indian auto industry.”