Indian auto industry on the road to recovery

Despite the historic zero sales in the first month of this fiscal year, the automotive industry has recovered faster than expected and witnessed the best performance so far. While most OEMs have posted double digit growth in passenger vehicles and two wheeler segments for Sep’20, whereas, the commercial vehicles witnessed a single digit drop over the low base figures of 2019.

This may be attributed to the pent-up demand, preference for personal mobility during the pandemic, gradual opening up of tier- 2, 3 markets, easing of supply chains, labour availability, excitement of new launches and pushing up of stocks at dealerships, with high expectations of the upcoming festive season.

Passenger Vehicles 

Maruti Suzuki India Limited (MSIL) – the market leader saw an uptick of 31% in its total (domestic + exports) sales and reported a growth at 111,459 units in Sep’20 over the same period last year. The company’s exports which were under stress until now, also saw green shoots.

For H1 FY21 (Apr-Sep’20), MSIL recorded a 36% decline in the domestic PV segment at 423,689 units as against 663,522 units in the same period last year.

Hyundai Motor India Limited (HMIL) – the country’s second largest carmaker highlighted that its latest models have contributed to its growth for Sep’20.

Tata Motors – Despite challenges owing to rising Covid-19 cases across the country, the company’s passenger car sales stood at 21,200 units, recorded 162% growth in last 8 years.

Kia Motors India registered its highest-ever sales of in the country last month, with recently launched Sonet dominating the compact SUV segment.

Mahindra & Mahindra Ltd. (M&M) witnessed a growth of 6% in Utility Vehicles with market sentiments indicating a robust festive demand across segments, both in rural and urban markets.

Honda Cars India Limited (HCIL), the Japanese carmaker registered domestic sales of 10,199 units in Sep’20 against 9301 units in the previous year.

Toyota Kirloskar Motors (TKM) reported a 20% decline in domestic sales at 8,116 units in Sep’20.However, the demand seems to pick up with new launches in the market.

Two Wheelers

Hero MotoCorp – the largest seller of two-wheelers in India recorded total sales of 715,718 units in Sep’20, highest sales in CY20. Two and three-wheeler maker Bajaj Auto recorded its highest-ever monthly exports at 185,351 units in Sep’20 with a growth of 16%.However, its commercial vehicle sales declined.

Commercial Vehicles 

Reeling under the impact of a sharp drop in volumes due to economic uncertainty and revision in load carrying norms, commercial vehicle has been the worst-hit segment in the industry.

However, the overall inquiry levels of the commercial vehicle segment are still at all-time lows despite the healthy uptick in demand from the e-Commerce, FMCG and agriculture transport sectors. Owing to the absence of major infrastructure and construction projects, Covid fear of public transport and economic slowdown, light commercial vehicles (LCV) are expected to make better sales than heavy & medium commercial vehicles (M&HCV).

Tractors 

Given the strong rural sentiments, retail demand for tractors continue to be buoyant backed by a very good monsoon leading to better kharif sowing and continued government support.

Domestic Sales Data of Sep 2020: