In what was a start-stop year for the country’s automobile industry, dispatches to dealers in India fell to a six-year low, with motorcycles and scooters being the major laggards in the last financial year (FY22).
According to the data released by Society of Indian Automobile Manufacturers (Siam), domestic auto sales in FY22 declined 6 per cent to 17,513,596 units compared to 18,620,233 in FY21. Dispatches of motorcycles and scooters fell 11 per cent to 13,466,412 units. The slowdown comes on the back of higher acquisition cost, rising fuel prices and slowing economic growth.
Interestingly, the two-wheeler segment catapulted exports to a six-year high in the same period, according to the Siam data.
“All segments are facing supply-side challenges and the industry is yet to see complete recovery following the disruptions it has been facing since early 2020”, Kenichi Ayukawa, president, Siam, said on Wednesday.
“The Indian auto industry has worked hard against these challenges to keep the value chain running, to indigenize parts, control cost, invest in new technologies, and enhance exports,” he added.
Auto exports jumped to 5.6 million units compared to 4.1 million units in the year-ago period, whereas exports of motorcycles and scooters rose to 4.4 million units, the highest since FY16. Two-wheelers comprise nearly 77 per cent of the overall sales in the automobile industry.
“The coming quarter will also see challenges with respect to production because there is no clarity on the semi-conductor issue,” Ayukawa said, pointing out that entry-level vehicles are under pressure due to the steep hike in fuel prices.
A weak rural demand has also been weighing in on sales in the world’s largest two-wheeler market. The year 2021-22 is the third year that has seen sales decline.
Amid a poor off-take in the domestic market, the two-wheeler manufacturers have been giving priority to exports. Led by Bajaj Auto (2.1 million units), two-wheeler exports bumped up to a six-year high of 4.4 million units in FY22 against 3.2 million units in the year ago-period. Other manufacturers including TVS Motor, Honda Motorcycle and Scooter India, Hero MotoCorp too shipped more to make up for the loss in the domestic market.
Meanwhile, the exports of commercial vehicles also touched a two-year high at 92,297 units, pumping up overall exports. Amid a strong domestic demand, passenger vehicle sales during the year increased to 577,875 units from 404,000 units from the year-ago period as the semiconductor shortage eased.
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