Passenger vehicle sales double over June, almost inch up to pre-covid levels

Passenger vehicle sales nearly doubled month-on-month in July as increase in production, pent-up demand, revival in economic activity drove purchases of small cars, sedans and sports utility vehicles across the country.
Industry estimates as many as 197,523 passenger vehicles were sold in the local market last month, which is a tad lower than 200,790 units sold in the same period last year, though significantly higher than 105,617 units sold in June 2020. Industry executives said they were optimistic about steady demand in the coming months after improvement in sales performance in the past two months.

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

Industry leader Maruti Suzuki posted a 91% increase in month-on-month volumes last month, while year-on-year sales inched up 1.3% to 97,768 units. The country’s biggest car maker had sold 13,865 units in May and 111,014 units in June 2019. “The numbers last month reflect good recovery on the supply side. Our sales also grew marginally over last year in July, though we are some way off from attaining peak levels seen in the past,” said Shashank Srivastava, executive director (marketing and sales). “

At Korean rival Hyundai too sales last month touched 98% of volumes registered in pre-covid times. The company sold 38,200 units in July, compared to 39,010 units recorded in July 2019, and 21,320 units seen in June 2020. Tarun Garg, Director (Sales, Marketing & Service), Hyundai Motor India said, “With the changing trend of preference for personal mobility, our consistent efforts are towards fulfilling the customer needs and meeting the market demand. With 38 200 units, July’20 domestic sales volume is 98% of July’19 domestic sales volume.”

( Passenger vehicles domestic sales only. Source : Companies)

Mahindra passenger vehicle numbers were 34% down year-on-year but jumped 36.5% month-on-month to 11,025 units in July. Veejay Nakra, chief executive officer (automotive division), M&M, said, “At Mahindra, we are happy to see a growing trend in our overall vehicle sales, buoyed by the continuing revival in demand, primarily in rural and semi urban India. It is encouraging to see that the enquiry and booking levels in July are significantly higher compared to June, both for utility vehicles and small commercial vehicles. As we ramp up production, the biggest challenge is on the supply side and working around these challenges is our top priority.”

Toyota Kirloskar Motor sold 5386 units last month registering a 40% growth in wholesales when compared to June 2020. Naveen Soni, senior vice president (sales & service), TKM said, “Despite various challenges, the month of July witnessed better sales in terms of both retail and wholesales when compared to June…In July, as a result of sporadic lockdowns & extensions being imposed in several parts of the country, lead us to a situation wherein our business was closed upto 20% of the market, in and around mid-July. It was due to the rest of the 80% of our business that has helped us close the month with a higher than June retails.” The lockdown in Bangalore also caused TKM to temporarily shutdown our plant for 4 days last month as a result of which the company produced less than the numbers originally planned.

Domestic sales Two Wheeler only
In the two-wheeler segment too, market leader Hero MotoCorp nearly reached pre-covid sales volumes at 506,946 units in July. “The robust volumes have been driven by strong retail sales due to the positive market demand. While there is cautious optimism on the demand trajectory going forward, sales continue to be impacted by the micro-lockdowns in several parts of the country. For the growth momentum to continue, it would be pertinent for state and local authorities to provide a stable and consistent business environment as the situation evolves”, Hero said in a statement.

Timely monsoon arrival coupled with record rabi harvest helped grow tractor sales. Mahindra sold 24,463 tractors last month, an increase of 28% over 19,174 units sold in the year-ago period. “These are our highest ever July sales. The strong demand momentum continued, aided by positive sentiments due to good cash flows to farmers, higher Kharif sowing, a timely and normal monsoon cumulatively across June & July and continued higher rural spending by the government”, said Hemant Sikka, president (farm equipment sector), M&M.

Sikka added though localized lockdowns in certain states and COVID related impact on specific suppliers led to supply side challenges during the month, it is expected that the sentiments are likely to remain buoyant translating into robust tractor demand in the coming months.