Chip shortage, increasing fuel prices subdue October auto sales as Indian buyers shy away from spending money

While the exports for companies like Maruti Suzuki has increased, the domestic sales for top automakers like Maruti Suzuki, Hyundai dropped as high as 35 percent in India.

New cars are seen at a parking lot in Shenyang, China. (Reuters)

India's major automobile manufacturers posted subdued sales numbers for October on the back of production issues caused due to a global shortage of electronic components. High fuel cost and longer waiting periods also dampened the sales momentum. Major automakers have recorded a sharp decline owing to the huge waiting periods, with some cars recording as high as 1 year of waiting. 

In terms of sales, auto major Maruti Suzuki India`s October total sales fell over 24 per cent to 138,335 units in October 2021 from 182,448 units sold during the corresponding period of last year. Besides, the company`s total domestic sales including passenger and commercial vehicles in addition to off-take by other OEMs fell during the month under review. The sales fell to 117,013 units last month from 172,862 sold in October 2020. However, it reported its highest-ever monthly exports of 21,322 units in October 2021.

"While the shortage of electronic components continued to affect the production of vehicles during the month, the company took all possible measures to minimise the impact," the automaker said in a statement. "Accordingly, the company sold more vehicles than the sales volume expected at the start of the month."

Hyundai Motor India also reported a decline in October cumulative sales. The company`s October sales fell by over 36.7 per cent on a year-on-year basis, falling to 43,556 units last month from 68,835 units sold during the corresponding period of 2020. Geography-wise, the domestic sales declined to 37,021 units from 56,605 units reported for the corresponding period of last year. Similarly, exports for the period decreased. The company was able to ship out 6,535 units down from 12,230 units sold abroad during October 2020.

Carmaker Kia India reported total sales of 16,331 units in October 2021. "The adverse supply chain situation has been an opportunity lost for us; however, our customers` and vendors` continuous support has enabled us to maintain a healthy performance throughout the year," said Tae-Jin Park, MD and CEO, Kia India. "As we foresee the issue to continue for the next few months, we assure our customers to keep optimising our production to the maximum level and ensure delivery at the earliest. We are keeping a close eye on the situation and are ready to take the necessary steps as and when required."

Another automobile manufacturer Honda Cars India`s domestic sales fell to 8,108 units in October 2021 from 10,836 units sold in domestic market in the corresponding period last year. "In terms of demand, the festive buying kept pace with last year and continues to show good momentum. Our factory despatches during October 2021 increased by 20 per cent as compared to September 2021 and we were able to wholesale our entire factory stock of the month," said Rajesh Goel, Sr Vice President and Director, Marketing & Sales, Honda Cars India. "While the situation still remains dynamic due to the ongoing supply side challenges, we are making all possible efforts to maintain a steady delivery pace and catering to the market demand effectively."

In terms of two-wheeler segment, Hero MotoCorp reported total sales of 5,47,970 units, down from 8,06,848 units sold during the corresponding period of last year. "Demand in the festive season has been building up as we move towards Dhanteras and Diwali, and we expect healthy retail over the coming weeks," the company said in a statement. "With the economy gradually opening up with several other positive indicators, such as encouraging farm activity and surge in preference for personal mobility, a swift revival in sales is expected in the coming months."

Honda Motorcycle & Scooter India`s total sales stood at 432,207 units, including 394,623 domestic sales and 37,584 exports for the month. "With the much awaited festival season in progress, we are witnessing a gradual rise in engagement registering more enquiries from prospective customers with each passing day," said Yadvinder Singh Guleria, Director, Sale s & Marketing, Honda Motorcycle & Scooter India. "The 2Ds (Dhanteras & Diwali) are just around the corner and we expect this auspicious period to amplify the positivity in terms of conversions."