February auto sales subdued due to chip shortages and high acquisition cost

On Tuesday, car major Maruti Suzuki India said its total sales last month fell slightly year-on-year to 1,64,056 units from 1,64,469 units sold in February last year.

Microchip shortages, along with the high cost of acquisition, slowed sales of major auto players in February 2022. On Tuesday, auto major Maruti Suzuki India reported that its total sales last month were down slightly from a year earlier. on the other to 1,64,056 units from 1,64,469 units sold during the same period of the corresponding year.

Domestic sales were 1,37,607 units and sales to other original equipment manufacturers were 2,428 units. The automaker announced its highest ever monthly exports of 24,021 units.

“The shortage of electronic components has had a minor impact on the production of vehicles which are mainly sold in the domestic market. The company has taken all possible measures to minimize the impact,” he said.

The shortage has impacted vehicle production, thereby lengthening lead times and increasing costs.

Similarly, Hyundai Motor India recorded lower cumulative sales on an annual basis. Cumulative sales last month fell to 53,159 units from 61,800 units in February 2021.

The company’s domestic sales fell to 44,050 units from 51,600 units sold in the corresponding period last year.

“As the industry continues to face a semiconductor shortage situation, Hyundai and its partners are continuously exploring alternatives to ensure customers can take delivery of their favorite Hyundai cars at the earliest,” said said Hyundai Motor India.

On the other hand, Tata Motors reported a 27 percent increase in overall domestic sales for February on an annual basis to 73,875 vehicles sold, compared to a sale of 58,366 units in the corresponding period last year.

The company’s domestic passenger vehicle sales increased 47% to 39,981 units from 27,225 units in February 2021.

In terms of commercial vehicles, domestic sales increased by 11%, to 37,552 units from 33,859 units in February 2021.

Another auto giant, Mahindra and Mahindra, reported an increase in overall sales over the past month. The company reported an 89% increase in vehicle sales to 54,455 vehicles on an annual basis.

“With overall sales of 54,455 vehicles, we achieved 89% growth in February 2022. All segments showed robust growth, including SUVs at 79%, which saw the highest monthly volume ever. said Veejay Nakra, Chairman and CEO. , automotive division, M&M.

“We expect demand to remain strong as the Covid situation eases. We continue to closely monitor the supply of semiconductor-related parts and take corrective action as needed.”

In terms of two-wheeler sales, rural distress as well as inventory correction efforts continued to weigh on sales.

Two-wheeler giant Hero MotoCorp sold a total of 358,254 units of motorcycles and scooters in February 2022, down from 505,467 units in the corresponding month of 2021.

Additionally, Honda Motorcycle and Scooter India recorded total sales of 312,621 units in February 2022, compared to 442,740 units sold in the corresponding period last year.

Honda’s exports for the month amounted to 26,944 exports.

“Passenger vehicle sales are showing signs of recovery as semiconductor issues ease, but geopolitical tensions will need to be looked at very closely as a prolonged geopolitical issue could pose supply chain challenges. , especially given the importance of Russia and Ukraine in the semiconductor manufacturing process value chain,” said Hemal Thakkar, Director of Crisil Research.

“Two-wheelers, current inventory levels are still high and OEMs are in correction mode, which is why we’ve seen a sequential correction in inventory every month since October or November 2021.”

Shamsher Dewan, Vice President and Group Head – Corporate Ratings, ICRA, said: “The semiconductor shortage was gradually easing. However, recent geopolitical developments risk derailing the industry again, as Russia and Ukraine are key input suppliers.

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