The chip shortage continues to be a killjoy for Indian automakers

Special Rapporteur

Global semiconductor shortages continued to spoil the Indian auto industry, with major manufacturers such as Maruti Suzuki, Hyundai, Toyota and Honda reporting a fall in wholesale prices for February. However, Tata Motors, Mahindra and Mahindra (M&M) and MG Motor all saw sales increase.

Market leader Maruti Suzuki’s domestic passenger car (PV) sales fell 7.4% last month to 133,948 units. “The shortage of electronic components has had little impact on the production of vehicles, which are mainly sold in the domestic market. The company has taken all possible measures to minimize the impact.” However, the company recorded its highest monthly export ever at 24,021 units.

Likewise, Hyundai Motor India saw domestic sales grow 14.6% to 44,050 units, while exports fell 10.7% to 9,109 units. “As the industry continues to grapple with semiconductor shortages, Hyundai, together with its partners, is continually exploring alternatives to ensure customers can take delivery of their favorite Hyundai cars at the earliest,” the company said.

While Toyota Kirloskar Motor said domestic sales fell nearly 38% to 8,745 units, Honda Cars reported a 23% fall in domestic wholesale sales to 7,187 units.

Yuichi Murata, Director, Marketing and Sales, Honda Cars India Ltd. said: “We are seeing an improvement in consumer sentiment as the COVID situation appears to be easing and markets are opening up. This is positive for the industry. On the supply side, the chip shortage also impacted our production and shipping in Feb 22. We hope that the situation will improve in the future so that we can better meet the market demand.”

Domestic company Tata Motors said domestic PV sales rose 47% to 39,981 units, while overall commercial vehicle (CV) sales rose 9% to 33,894 units.

Similarly, M&M saw a significant 80% growth in domestic PV sales last month, with 27,663 units. In the commercial vehicle segment, the company sold 20,166 vehicles and recorded growth of 119%.

Veejay Nakra, CEO, Automotive Division, M&M Ltd. said: “With total sales of 54,455 vehicles we achieved growth of 89%… All segments showed robust growth including SUVs at 79% which was the highest ever monthly volume. We expect demand to remain strong as the Covid situation continues to ease. We continue to closely monitor the supply of semiconductor-related parts and take corrective action as necessary.”

Monthly domestic sales of Honda Cars India fell to 7,187 units compared to 9,324 units a year earlier. On the other hand, MG Motor saw retail sales grow 5% to 4,528 units.

In the CV segment, Ashok Leyland saw sales grow 4% to 13,281 units, while VE Commercial Vehicles saw an increase of 7.3% to 5,856 units.

In the two-wheeler category, leader Hero MotoCorp saw domestic sales fall 31.5% to 3,31,462 units. “With a sharp drop in the number of COVID-19 cases and the gradual opening of the economy with several other positive indicators, such as the easing of lockdown restrictions, as well as the measures announced in the Union budget for FY23, there is a rapid revival in sales expected in the coming months,” the company said.

Rival Honda Motorcycle and Scooter India saw sales fall to 3,12,621 units with 2,85,677 domestic sales compared to 411,622 last year.

At TVS Motor, headquartered in Chennai, domestic sales of two-wheelers were 173,198 units versus sales of 195,145 units. “The shortage in the supply of semiconductors has affected the production and sale of premium two-wheelers. We are cautiously optimistic that semiconductor supply will improve in the coming months.”

Likewise, Royal Enfield recorded domestic sales of 52,135 motorcycles, down from 65,114 motorcycles in the same period last year. “Supply chain constraints due to semiconductor chip shortages persisted throughout the month and Royal Enfield is eagerly working with its supplier ecosystem to resolve the issue.” It said, adding that international sales continued the upward trend, with the company reporting a 55% growth in exports.

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