Demand Revival Puts Auto Sales In Top Gear, Maruti Posts 50% Growth

Auto sales, a key indicator of the macro economy, showed significant growth in July, with passenger vehicle volumes improving on the back of a healthy order book and an uptick in enquiries and bookings in urban and rural areas. The wage revisions for government employees have also likely aided demand.

India’s largest carmaker, Maruti Suzuki, posted total sales of 162,462 units in July 2021 as against 108,064 units during the same period last year, registering a 50 per cent growth. The company’s total sales in the month include domestic sales of 136,500 units, sales of 4,738 units to other Original Equipment Manufacturers (OEMS), and 21,224 units for exports.

Maruti said that domestic sales in July remained lower than the previous high recorded during the same month in 2018-2019 owing to the pocket lockdowns in different parts of the country. The company said that it is witnessing an encouraging revival in demand after a slowdown due to the impact of the second wave.

“With fast unlocking happening across the country, we are witnessing a good recovery, and in July we have seen a pickup in enquiry that is roughly 85 per cent of Q1 of the last financial year,” said Shashank Srivastava, senior executive director, marketing and sales at Maruti Suzuki.

Hyundai, the country’s second largest carmaker, too, has reported a 45.9 per cent year-on-year growth in sales. “A positive growth momentum is clearly visible in the passenger vehicle industry, with the stabilisation of macro-economic factors, good monsoons and increase in consumer shift towards personal mobility,” said Tarun Garg, director for sales, marketing and service, Hyundai Motor India.

Mumbai-based Tata Motors, which has models such as Nexon, Harrier and Safari in the domestic market, sold 54,119 vehicles in July — a 19 per cent growth compared to the same period last year.

While industry executives feel that there will be no shortfall in consumer demand in the near future, most are wary of challenges such as the shortage of semiconductors or the country being hit with a third wave of the pandemic.

“The severe shortage of chips is expected to continue for some time and will lead to supply constraints. While we expect overall consumer demand to rise, we should remain cautious about the potential threats posed by the third wave,” said Rakesh Sidana, director-sales, MG Motor India.

Analysts tracking the sector said that they expect auto sales to be strong in the second half of the financial year. Industry volumes for two-wheelers are also likely to be better sequentially, Emkay said, but it will be low compared to 2019 levels, as demand remains subdued in the case of low-income groups.

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