Passenger vehicle sales nearly double in June driven by pent-up demand

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Passenger vehicle sales nearly doubled in June, albeit on a low base, driven by pent-up demand with more markets opening up as state governments have eased restrictions imposed during the second wave of the pandemic.

According to industry estimates, as many as 255,674 passenger vehicles were sold in the local market in June compared with 116,928 units a year earlier. Sequentially, the number grew almost two-and-a-half times from the 103,000 units sold in May.

These are dispatches from factories and not retail sales, and data are also not comparable as production and sales were disrupted last month as well in June 2020 due to Covid-related challenges.

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The country’s largest carmaker, , sold 124,280 passenger vehicles last month, which was almost two-and-a-half times the June 2020 sales.

“Sales in Quarter 1 of both FY20-21 and FY21-22 have been far from normal owing to Covid-19-related lockdowns and disruptions and hence any comparison would not be very meaningful,” the company said in a statement.

At the local unit of Korea’s Hyundai Motor, wholesale volume shot up by 90% to 40,496 units.

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“In the past few days, we have seen demand coming back strongly. Definitely, there is some pent-up demand in the market. Consumer preference for personal mobility also remains strong. Sales should improve further in July and August,” Tarun Garg, director (sales, marketing and service) at Hyundai Motor India, recently told ET.

In June, passenger vehicle sales are estimated to have recovered to 75% of the 270,000 units retailed on a monthly basis prior to the second Covid wave hit the country. In May, this was just about 28%.

Tata Motors and Mahindra & Mahindra also reported robust growth in volumes at 24,110 units (from 11,419 units) and 16,913 units (from 8,075 units), respectively.

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Veejay Nakra, Mahindra’s chief executive for the automotive division, said: “With the opening up of the market in a phased manner, we are seeing a boost in demand in both urban and rural and we expect the upward trend in demand to continue across all segments and markets.”

However, Nakra added even though the supply chain had largely stabilised, the global shortage of semiconductors continued to be a challenge.

Shailesh Chandra, president of the passenger vehicles business unit at Tata Motors, said the company was working on fulfilling its strong order book in a supply constrained environment.

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Toyota Kirloskar Motor said it was receiving good levels of enquiries and new customer orders since resuming operations on June 15. Naveen Soni, its senior vice-president, said he expected retail sales to be better in the coming months, provided the pandemic didn’t pose new challenges.

In the commercial vehicle segment, market leader Tata Motors sold 19,594 units last month, as against 7,968 units the same month a year earlier. Girish Wagh, executive director & president (commercial vehicles business unit) Tata Motors, said with decentralised restrictions and focus on micro containment zones this year, the sale in April-June was 4.7 times the same quarter last year. “With demand across all segments impacted, we realigned our production to the revised retail visibility. The trucker and tipper sentiments indices saw a sharp drop, being comparable only with the level seen during the complete lockdown last year. However, with easing restrictions and gradual reopening during the last fortnight of June’21, we are witnessing increasing enquiries and retails,” he added.

Demand for two-wheelers last month remained muted with Bajaj Auto and TVS Motor Company registering growth of 6% (to 155,640 units) and 0.4% (to 145,413 units) in sales, respectively.

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Hero MotoCorp saw sales increase marginally by 1.8% to 438,514 units last month. “Heading into the upcoming festive season, the company remains cautiously optimistic about the customer demand in the coming months. The expected surge in personal mobility, forecast of a normal monsoon in several parts of the country and the improving rural sentiment are expected to lead to a swift revival in sales”, Hero MotoCorp said in a statement.

At Royal Enfield, volume fell 2% to 35,815 units last month.

In the farm equipment sector, demand continued to remain strong with Mahindra reporting growth of 31% to sell 46,875 tractors in the domestic market last month.

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Hemant Sikka, president (farm equipment sector) at Mahindra, said the company continued to remain optimistic about tractor demand in the coming months.

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