Passenger vehicles to continue driving auto sales in February, EVs gain a stronghold
A robust demand for passenger vehicles (PVs) is expected to boost India’s auto sales numbers for the month of February, as per analysts. This is despite a moderate drop in customer enquiries across carmakers, especially at a time when companies are transitioning to the second phase of BS VI emission norms (also known as BS6 Phase 2).
According to analysts at Motilal Oswal, although retail volumes are expected to slow down in February when compared to January, a marriage season in the northern markets and a healthy uptick in urban markets are expected to drive a 10-12% year-on-year growth in the retail segment for the month.
“The month of February has been seasonally weak for most of the dealers/OEMs (original equipment manufacturers). Our discussions suggest weakness in two-wheeler sales except for the EVs (electric vehicles), while for PVs the demand remains strong but production constraints still remain on the automatic version and higher variants of SUVs (Sports Utility Vehicles),” said a report by LKP Securities.
According to a dealer check by analysts, both customer footfalls and demand for passenger vehicles have gained strength every month since the pandemic subsided. However, persistent supply chain issues have resulted in carmakers losing out on 15-20% of their business, failing to take full advantage of this rising demand for PVs.
Premium cars, and more specifically, the higher-end automatic variants that use technologies like automatic gear shift (AGS) and automated manual transmission (AMT) are the ones facing the most issues, with companies like Maruti Suzuki reporting waiting periods as long as 4-6 months.
| Car models | Waiting period |
| Hyundai Creta | 8-9 months |
| Maruti Suzuki Ertiga (CNG) | 6 months |
| Maruti Suzuki AGS and AMT variants | 4-6 months |
| Tata Tiago EV | 2 months |
| M&M Thar (2WD diesel) | 1 year |
Analysts also noted that the chip shortage is a bigger problem for Mahindra & Mahindra, since its entire portfolio consists of SUVs, which use chips more than entry-level cars and hatchbacks.
Overall, analysts say the robust passenger vehicle demand has resulted in low inventory levels – which are down to 15-20 days – across Maruti Suzuki, Tata Motors and Hyundai.
According to a Motilal Oswal report, Maruti Suzuki’s Brezza, Grand Vitara and the newly-launched Jimny and Fronx have an order book between 10,000 to 70,000 units.Read More…
