Car dispatches up nearly 30% in August

Indian car makers recorded yet another month of bumper sales, increasing dispatches by nearly a third in August as production constraints eased and dealers stocked vehicles to meet robust customer demand in the festive period.

Industry estimates sales of passenger vehicles to have increased 29-31% to 335,000-340,000 units in August. This is the fastest growth registered in wholesale volume this year, barring May, when dispatches had tripled on the low base of last year. Operations across manufacturers were disrupted in the same period last year after the second wave of the pandemic due to the global shortage of semiconductors.

With availability of chips improving, passenger vehicles sales peaked at 341,000 units in July 2022. In the current calendar year, this is the fifth month that dispatches from factories have exceeded 300,000 units.


Sales Momentum Continues
Last year, 256,868 units were dispatched from factories on an average every month.

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

Senior industry executives are upbeat about growth prospects in coming months, with the industry sitting on pending bookings of more than half a million units. "Demand looks good as we head into the festive season," said Shashank Srivastava, senior executive director, marketing and sales, Maruti Suzuki India Ltd. "Our new launches have been received well by customers. The Brezza alone has received more than 100,000 orders. We expect the momentum to continue in the coming month."

He declined to comment on the exact volume for the month.

Sales of passenger vehicles had been hit hard at the onset of the pandemic and fell to 2.43 million units in 2020. Demand has since recovered sharply, outpacing supplies and stretching the waiting period for customers, leading vehicle makers to secure multiple sources for parts. A global shortage of semiconductors, a key component, added to supply constraints, disrupting operations for the better part of the past year and a half.

"We have been observing a growing sales momentum since the start of CY22," said Hardeep Singh Brar, vice president & head-sales & marketing, Kia India. "In August, we are expecting a similar performance, with a growth of 30% above last year. The increase is at par with our estimates for 2022, and we are confident of maintaining this growth for the rest of the year."

While the supply side is improving, a series of launches-Maruti Suzuki's Brezza and Grand Vitara, Toyota's Hyryder, Hyundai's Venue and Tucson, Tata's Punch, and Mahindra & Mahindra's XUV700 and Scorpio-is keeping consumer interest strong.

"With easing of supply chain, production has increased," said Ravi Bhatia, president at consultancy firm Jato Dynamics. "This will help OEMs (original equipment manufacturers) address the waiting time. July had already shown improvement and we expect the trend to improve in August and going forward."

Pending bookings are at 650,000-700,000, according to experts. Srivastava, however, cautioned that it will be crucial for production to be in line with demand patterns so that deliveries can be made against bookings.