Statsguru: Six charts show automobile sector is still not out of the slump

Although the Indian economy is expected to grow by 9 per cent in the current fiscal year, data indicates the automobile sector is still not out of the slump. Data published by the VAHAN portal shows that two-wheeler sales in 2021 were the lowest in eight years. Two-wheeler registrations fell even before the pandemic, but declined further in 2021. About 11.77 million motorcycles and scooters were sold last year, which was lower than 12.9 million two-wheelers sold in 2014 (chart 1). Car sales were higher than last year but were still below the level witnessed in 2018 when 2.76 million motor vehicles were sold. In 2021, 2.72 million cars were sold, compared to 2.21 million in 2020 (chart 2).

Although two-wheeler registrations declined nearly a third compared to 2018, three states witnessed an increase in sales (chart 3). 

For motor cars, the decline was less pronounced than in 2018, and over 14 of the 32 states and Union territories on the VAHAN database registered a rise. West Bengal, Chhattisgarh, Uttar Pradesh, Maharashtra, Haryana, Karnataka and Odisha were among the large states that witnessed a surge in motor car registrations in 2021. Car sales in Chhattisgarh and West Bengal were 15 per cent higher than in 2018. For the country, however, motor car registrations declined 1.7 per cent (chart 4). 

The sector is expected to witness more pain, as input prices may lead to manufacturers passing on the costs to the consumers, which may affect demand. Aluminium prices were 35.5 per cent higher in the international market compared to 2018, and the NSE Metals Index was up 48.8 per cent during the same period. Although steel prices in the global market have dropped from the peak, they are higher than in 2020 (chart 5). 

Maruti and Tata Motors have already announced price increases for their vehicles.

Higher fuel prices may further prove to be a pain point, as buying decisions get affected. Brent crude touched a high of $88 per barrel last week (chart 6). 

With tensions brewing in West Asia, prices may rise further, burdening consumers. The retail price of petrol had crossed Rs 100 last year.

StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines