Wholesales of passenger vehicles continue to grow in December as manufacturers fill inventory post-festive season

The growth in dispatches comes as a result of low base in the corresponding period when auto makers witnessed contraction in consumer demand as a consequence of the economic slowdown and increase in vehicle prices due to change in emission and safety norms.

Market leader, Maruti Suzuki India, reported a robust 17.8% year-on-year growth in domestic wholesale to 146480 units in December as demand for its hatchbacks continue to rise on the back of gradual recovery in economic activity and increased preference for personal mobility to avoid Covid-19 infection.

Sales of the company’s small cars and hatchbacks increased by 14.5% year – on – year to 102568 units in December, while those of utility vehicles rose 8% to 25701 units.

Shift in customer preference towards sport utility vehicles, especially in the urban areas, continues to benefit Hyundai Motor India – the second largest – as vehicle dispatches to dealerships to increased by 24.9% to 47400 units. Hyundai’s sport utilty vehicles – Venue (a compact SUV and Creta (a midsize one) have been experiencing robust demand throughout the year despite Covid-19 induced economic slowdown.

According to S S Kim, president, Hyundai Motor India, the world has witnessed multiple challenges in 2020. However, as the most innovative brand, Hyundai has emerged stronger out of this crisis, leading the way for economic revival.

“This clearly reflected in our domestic sales that achieved new horizons, with Hyundai managing to increase market share for the second year in succession. Hyundai has also emerged as one of the most preferred brands for SUVs in the country with Creta and Venue leading sales charts. Looking towards the future, we are proceeding with cautious optimism and positively anticipate green shoots of recovery in 2021,” added Kim.

Hyundai reported the highest ever production of 71178 units in December as demand in domestic and export markets continue to rise on the back of a gradual recovery in the global economy.

Mumbai based Tata Motors witnessed a whopping 84% increase in wholesale to 23545 units during the month, albeit on a low base, as demand for its compact vehicles like Altroz and Tiago continue to rise. Mahindra and Mahindra also improved its monthly dispatches by 3% to 16182 units on the back of increased demand for its new Thar.

“The passenger vehicle industry continued to grow robustly in Q3FY21, owing to pent up demand, strong festive season and shift towards personal mobility. Tata Motors passenger vehicle business has been witnessing strong response for its ‘New Forever’ range, which is being supported by continuous ramp up of supplies,” said Shailesh Chandra, president, passenger vehicle business unit, Tata Motors.

Despite marginal decline in sales, wholesale of commercial vehicles continues to show signs of a pick-up due to the low base and improvement in economic activity, after a gap of more than two years. Dispatches of commercial vehicles at Tata Motors dropped by 5% to 29885 units while the same at Ashok Leyland increased by 14.2% to 11857 units. Volumes at Volvo Eicher Commercial Vehicles also declined by 7.7% to 4069 units.

“Automobile companies delivered better than expected volume performance in December with continuation of positive growth trajectory for most segments. Decent retail sales coupled with inventory refilling supported overall performance in the month. Moreover, commercial segment has been exhibiting good improvement since past two months. We expect volume traction to continue for automobile industry in coming months,” said Mitul Shah, vice president, research, Reliance Securities.

Due to softening demand of entry level motorcycles in rural and semi-urban areas, domestic sales of Hero MotoCorp – country’s largest two-wheeler manufacturer – increased by just 3.16% to 447335 units.