June factory dispatches recover on improved chip supply: SIAM

The industry seems to have bounced back in the first quarter of the financial year 2022-23 as Covid restrictions wane and supply chains get better with an improved chip supply. The month of June 2022 also saw the total passenger vehicle dispatches to dealers rising 19% year-on-year to 20,81,148 units, data released by the industry body SIAM (Society of Indian Automobile Manufacturers) shows.

Notably, the SIAM data does not include monthly dispatches from automakers like BMW, Mercedes, Tata Motors and Volvo. In its auto data released this month, India's second-largest automaker Tata Motors said around 79,606 units were dispatched in the domestic market. It recorded an 82% rise in June 2022 from 43,704 units sold in June 2021. On a month-on-month basis, the wholesales increased by 101%.

Passenger vehicle sales in June 2022 increased to 2,75,788 as compared to 2,31,633 PV units dispatched in June 2021. A total of 13,08,764 units were dispatched to dealers in June 2022 as compared to 10,60,565 units sold during the same period last year. Three-wheeler wholesales were 26,701 in June 2022, up from 9,404 units in June 2021.

SIAM director general Rajesh Menon says recently, the government has taken significant measures to ease the inflationary pressure and help the common man by reducing central excise duty on petrol and diesel and changing the duty structure to moderate prices of steel and plastic. "Industry keenly looks forward to similar support on CNG prices, which has seen an exponential increase in the last 7 months. Support on CNG prices would help the common man, facilitate public transport and will enable a cleaner environment,” says Menon.

For the April-June quarter, the total production of passenger vehicles, commercial vehicles, three-wheelers, two-wheelers, and quadricycles was 63,26,483 units.

PV sales to dealers rose 41% to 9,10,431 units in the April-June period from 6,46,272 units during the same quarter the previous year. Commercial vehicle sales were 224,512 units in April-June 2022, almost double as compared to 1,05,800 units during the same period last year. Two-wheeler dispatches also rose to 37,24,533 in Q1 FY23 against 24,13,608 Q1FY22. Three-vehicle dispatches were 76,293 units in April-June 2022, about a three-fold rise from 24,522 units in the same period last year.

The retail data for the auto industry, released by the Federation of Automobile Dealers Associations (FADA) this month, also showed the sector trudging towards a recovery in the post-pandemic world. The FADA data for June 2022 says passenger vehicles and tractors — which were already above pre-pandemic levels for the last few months — grew by 27% and 40%, respectively, the commercial vehicle sales witnessed a growth of 4%, compared to June 2019, for the first-time post-pandemic.

FADA, however, also flagged the inflationary environment that exists currently as a cause for concern, in the wake of the Russia-Ukraine conflict. "The Russia – Ukraine crisis has increased inflationary pressure the world over. The RBI Governor, during the recent Monetary Policy meeting, has also flagged high inflation as a major cause of concern," says the industry body, adding that rural India is yet to come out of the crisis properly.