Carmakers wary of chip crunch, fuel prices
NEW DELHI: Passenger car makers increased wholesale dispatches in June from May after states eased mobility restrictions. However, industry experts are worried over how the sharp rise in fuel and steel prices, semiconductor shortage and a possible third wave impact vehicle sales.
Dispatches of passenger vehicles to dealerships more than doubled to 231,633 units in June from 41,536 units in May, when India’s deadly second wave peaked. Passenger car sales nearly tripled to 121,378 units, while sales of utility vehicles more than doubled to 100,760 units during the month, according to data compiled by the Society of Indian Automobile Manufacturers
(Siam) on Wednesday.
In the quarter ended March, most passenger vehicle makers reported sustained recovery in retail sales, while supply constraints due to a shortage of semiconductors led to a longer waiting period for certain models. Many of them have started production in all three shifts from June and have set higher targets for July.
Maruti Suzuki India Ltd, the country’s largest carmaker, more than tripled domestic dispatches sequentially to 124,280 units in June from just 35,293 units in the preceding month. Hyundai Motor India Ltd reported a 62% month-onmonth rise in wholesale dispatches to 40,496 units in June.
Tata Motors’ passenger vehicle wholesales rose 59% to 24,110 units in June, and Mahindra and Mahindra’s more than doubled to 16,913 units compared to just 8,002 units in May.
Automakers are not being able to predict demand for the coming months due to a significant increase in commodity prices, shortage of semiconductors and the fear of the third wave of covid infections, said Kenichi Ayukawa, president of Siam.
“Due to high fuel prices, people will hesitate to use their vehicles, and that is not very good for us. However, we will have to see how it impacts demand. With such uncertainty, it is difficult to predict demand for vehicles,” said Ayukawa, who is also the managing director of Maruti Suzuki. Ayukawa said some states are yet to reopen fully, and auto dealers are not able to function properly.
The auto industry came under pressure in the first week of April when Maharashtra implemented strict lockdown measures. Delhi, Haryana, Karnataka and Tamil Nadu, among others, followed as covid cases surged.
Auto majors, including Maruti Suzuki, Hero Motocorp Ltd and Hyundai, either stopped production or reduced output significantly.