[vc_row][vc_column][vc_column_text css=”.vc_custom_1651736552191{border-top-width: 3px !important;border-right-width: 3px !important;border-bottom-width: 3px !important;border-left-width: 3px !important;border-left-color: #050505 !important;border-left-style: solid !important;border-right-color: #050505 !important;border-right-style: solid !important;border-top-color: #050505 !important;border-top-style: solid !important;border-bottom-color: #050505 !important;border-bottom-style: solid !important;border-radius: 1px !important;}”]
Decoding Automobiles April 2022 Performance
[/vc_column_text][vc_separator][vc_column_text css=”.vc_custom_1651736599168{margin-top: 20px !important;margin-bottom: 20px !important;}”]Commenting on how April’22 performed, FADA President, Mr. Vinkesh Gulati said, “The month of April saw similar Auto Retail figures as March’22. While YoY comparison with April’21 shows all categories in green with high growth rate, it is important to note that both April’21 and April’20 were affected by nation-wide lockdown due to phase 1 and 2 of the Covid wave which witnessed no to negligible business. Hence a better comparison will be with April’19 which was a normal pre-covid month.
April’22 when compared with April’19 reveals that we are still not out of the woods as overall retails were down by -6%. Apart from PV and Tractors which grew handsomely by 12% and 30%, 2W, 3W and CV are yet to turn green as these categories were down by -11%, -13% and -0.5% respectively.
With Russia – Ukraine war continuing and China under lockdown, the global Auto Industry continues to witness supply crunch as semi-conductor shortage along with high metal prices and container shortage prevails. Customers of PV segment hence continues to witness long waiting period.
The 2W segment which has witnessed slight increase in sales when compared to last month is extremely sensitive to price hikes and continues to remain below pre-covid levels. Apart from rural distress, multiple price hikes coupled with high fuel prices are keeping price sensitive entry level 2W customers away.
The CV segment after a long downturn which began post the announcement of axle load norms in 2018 is now witnessing demand recovery as all sub-categories continue to inch north. Government’s push for infra spending further aids sale.”
[/vc_column_text][vc_single_image image=”69537″ img_size=”large” alignment=”center” css=”.vc_custom_1651736710570{margin-top: 10px !important;margin-bottom: 10px !important;border-top-width: 1px !important;border-right-width: 1px !important;border-bottom-width: 1px !important;border-left-width: 1px !important;border-left-color: #0f0f0f !important;border-left-style: solid !important;border-right-color: #0f0f0f !important;border-right-style: solid !important;border-top-color: #0f0f0f !important;border-top-style: solid !important;border-bottom-color: #0f0f0f !important;border-bottom-style: solid !important;border-radius: 1px !important;}”][vc_column_text css=”.vc_custom_1651736738780{margin-bottom: 15px !important;}”]As the trend on the chart shows, only Passenger Vehicle and Tractor segment have sales above the pre-pandemic levels. 2-wheeler, 3-wheeler and commercial vehicle have been suffering since the beginning of the pandemic. On a m-o-m basis, commercial vehicle and 2-wheeler have shown marginal uptick and other segments have lost pace.
The Russia – Ukraine war and China lockdown will continue to create demand-supply mis-match thus delaying the availability of PVs. This coupled with RBIs out of turn announcement of increasing repo rate by 45 bps has taken everyone off-guard. The move will curb excess liquidity in the system and will make auto loans expensive.
While PV segment may be able to absorb this shock due to long waiting periods, 2W segment is already reeling due to underperforming rural market, vehicle price hikes and high fuel costs. High interest rates for vehicle loan will be an additional blow for this segment. Certainly, this move will slow the speed of auto retail and dampen the sentiments further.
On the other hand, Private consumption is regaining traction backed by a recuperating contact intensive services and rising discretionary spending. Also, Skymet has come out with its normal monsoon forecast. If the same is evenly distributed, it will have a positive rub-off on rural sentiment as farmers will be able to get better crop realisation thus increasing their disposable income. It will thus benefit Tractor and 2W sales. This along with marriage season in coming days will also see a traction in Auto Retail.[/vc_column_text][vc_column_text css=”.vc_custom_1651736768081{margin-bottom: 15px !important;}”]
2-wheelers:
HeroMoto remains at top of the pack in terms of number of vehicles sold with about 35% of the market share; followed by Honda Motorcycles with 25% share, TVS Motors with 15% share and Bajaj Auto with a 10% share. Among the top 5 brands, TVS motors is also hovering close to its pre-covid sales where as other players’ sales are far below their pre covid levels.
TVS Motors has also gained market share since last year and other companies have lost it to newer players, mainly electric 2 wheelers. Electric vehicles maybe in trend but they still constitute less than 5% of the entire market share of 2-wheeler space. However, the growth in some names have been phenomenal on a yearly basis, as can be seen in the table below.[/vc_column_text][vc_single_image image=”69538″ img_size=”large” alignment=”center” css=”.vc_custom_1651736860068{margin-top: 10px !important;margin-bottom: 10px !important;}”][vc_column_text css=”.vc_custom_1651736886598{margin-top: 10px !important;margin-bottom: 15px !important;}”]
Passenger Vehicle:
Maruti remains the top passenger vehicle seller in the country with 40% market share, followed by Hyundai with 14%, Tata motors with a little less than 14%, Mahindra and Mahindra with 8% and Kia Motors with 6% share. However, Maruti and Hyundai have lost a sizeable portion of their market share over the years to Tata Motors and Mahindra and Mahindra and some newer entrants.
Passenger vehicles segment as a whole have reached its pre-covid levels, however, some players have grown exponentially while some have sales which are either similar to or lower than their pre-covid levels. Tata Motors and Mahindra and Mahindra stand out in these respects. Monthly and yearly growth can be found in the table below.[/vc_column_text][vc_single_image image=”69539″ img_size=”large” alignment=”center” css=”.vc_custom_1651737044774{margin-top: 10px !important;margin-bottom: 10px !important;}”][vc_column_text css=”.vc_custom_1651737067679{margin-top: 10px !important;margin-bottom: 10px !important;}”]
Tractor:
Tractor market performed poorly month on month, even when its yearly performance has been strong. Tractor were the most resilient market during COVID, but now it is losing steam on the back of inflation. Mahindra and Mahindra are the largest in terms of market size. Here is the month on month and year on year growth of tractor companies.[/vc_column_text][vc_single_image image=”69540″ img_size=”large” alignment=”center” css=”.vc_custom_1651737137791{margin-top: 10px !important;margin-bottom: 10px !important;}”][vc_separator][vc_column_text]
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