Domestic PV sales see lukewarm growth of 1.9% due to strong base effect

Domestic wholesale of passenger vehicles (PVs) observed a lukewarm growth of 1.9 per cent year-on-year to 327,700 units in June this year due to a strong base effect.

Shashank Srivastava, the Senior Executive Officer, Marketing and Sales of Maruti Suzuki, mentioned that apart from the base effect, the PV manufacturers are facing two other challenges: high-interest rates and uncertainty over monsoon. 

“Even if everything goes well on these two fronts, showing a sizable growth over a strong base observed in Q1 of 2022-23 would be quite a tough challenge,” he told reporters.

Maruti Suzuki’s domestic PV wholesales jumped by 5.77 per cent to 139,648 units in June. 

“Maruti Suzuki grew faster than the industry. If you look at the growth observed for the industry, excluding Maruti, there was a fall of 2.1 per cent. So, the overall industry grew by just 1.9 per cent,” he said.

He further added that Maruti’s numbers are creditable, considering the company’s production was closed for ten days. “So, the rate of production was not there,” he explained.

Srivastava said that the industry’s wholesale in June last year stood at 321,600 units, which was the highest-ever June sales. “So, the base effect has kicked in,” he noted. 

The wholesales in July have been observing a strong base effect, he added. 

“In July last year, the industry’s wholesales stood at 342,000 units, which was huge. The highest-ever monthly sales in India stood at 355,000 units (recorded in September last year),” he explained. He further said that the industry recorded the best-ever April sales this year, and the same was observed for May and June 2023.

Noting that the semiconductor chip supply was not up to the mark in the first quarter of 2023-24, Srivastava said that its availability is expected to be better in the second quarter. “It is difficult to say if the chip supply will normalise this year, but we expect quick improvement in the coming quarters,” he added.

He also mentioned that the retail stocks – or stocks with dealers -stood at 261,000 units as on July 1 for the domestic PV industry. 

“The retailers have a healthy stock of about 24-25 days. However, for some cars, there is stock for 40-45 days, while for some other high-demand models, the stock is just for 1-2 days,” he explained.

As for Hyundai, its domestic PV sales increased by 2.04 per cent year-on-year to 50,001 units in June 2023. 

Hyundai Motor India’s Chief Operating Officer (COO) Tarun Garg expressed hope and said that there is a positive customer traction for all products of the company and its models — Verna, Creta and Tucson — have attained leadership positions in their respective segments in the first half of 2023. 

On the other hand, Kia India’s domestic PV sales decreased by 19.28 per cent y-o-y to 19,391 units in June 2023.