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Auto Sales September 2021: Passenger Vehicles, Two Wheelers, Commercial Vehicles & Tractors

Auto Sales September 2021: Passenger Vehicles, Two Wheelers, Commercial Vehicles & Tractors

Last updated: 04 Oct, 2021 | 02:10 pm

Auto Sales September 2021: Maruti, M&M, Tata Motors, Bajaj Auto, Eicher & More

It’s the start of the new month and the auto industry is ready with their September sales numbers. Let’s find out which company fared well in its segment.

Four Wheeler Cars:

Passenger vehicle (PV) numbers were mostly mixed-bag. The total industry sales declined 37% YoY in September 2021 and 29% MoM. 

The factors affecting the numbers were:

  • The ongoing supply constraints due to chip shortages which are more prevalent in PVs weighed heavy on sales numbers, especially this month.
  • There is strong demand for PVs, supported by increased preference for personal mobility, high order books (normal cancellation levels) and low inventory/new product launches. 
  • Discounts have moderated further due to current demand-supply mismatch. While festivals could be a tad disappointing, there is scope for regaining lost volume during the leaner months post festivals, led by strong demand and improving supply chain dynamics.

Maruti Suzuki:

  • According to the management, the sales were impacted due to electronic components shortage. It expects the semiconductor shortage likely to remain for a year.

Tata Motors: 

  • Tata Motors, among a few, saw year-over-year growth in sales numbers.
  • Tata Motors, like everyone else, is also facing the heat of chip shortage. Their solution is to reduce the amount of chips used per car and acquiring chips from the open market. They are also trying to build inventory for the festive season.
  • Tata’s EV segment registered a 250 per cent growth in sales with 1,078-unit sales in September 2021 as compared to 308-unit sales in the same period last year. Moreover, the EV segment has registered a cumulative sales figure of 2,704 units as compared to 924 units sold in the same period last year.
  • Tata has made some serious gains in market shares due to new product launches in the SUV segments. The company also launched under 10 lakh utility vehicle “Punch” on October 4th.

Mahindra & Mahindra

  • M&M’s PV sales decreased by 12.3% YoY/ 18.5% MoM. 
  • The company is impacted due to global semiconductors shortage. However, the company has good order books of its Thar, XUV 300, Bolero Neo and Bolero Pick-up. The company has revealed that its most-awaited XUV700 is getting good response from customers. 

Two Wheelers:

Total Two wheeler sales were down 13% YoY (+9% MoM).

  • For 2Ws, inquiry levels in the domestic market are gradually improving.
  • It is noted that the entry level 2W segment has been witnessing better trends on the back of improved rural sentiments.
  • However, manufacturers with a higher export exposure are expected to perform relatively better. 

Commercial Vehicles:

Commercial vehicle volumes were in-line with expectation; up 8% YoY, 15% MoM.

  • CV volume should be supported by demand from infrastructure and construction sectors.
  • A sharp uptick in CV volume to sustain as economic activities pick up pace and financing issues/cash-flow constraints are ironed out.

Tractors:

Tractor volumes were down 13% YoY (Up 79% MoM): 

  • Tractor sales declined on-year due to a relatively high base.
  • However, underlying rural sentiments are holding reasonably well, which should support volume going forward. 
  • Further, a reasonable monsoon season bodes well for the tractor industry. 

INDmoney Analysis

  • For most players in the two-wheeler industry, the sales have softened from record high levels witnessed in October-20. Rising fuel costs and cost of ownership are acting as the major headwinds in this category. 
  • A total of 14.7 lakh two-wheelers were sold in the domestic market, with Hero MotoCorp retaining its leadership position. Hero now commands a market share of more than 34%, selling 5.3 lakh vehicles in Sep-21.  
  • In the four-wheeler space, semiconductor shortages seem to be the major headwind, with most of the listed players including Maruti Suzuki, M&M reporting declining sales. Even though the demand remained strong due to increased preference for personal mobility amid the pandemic, vehicle makers faced challenges in dispatching vehicles ahead of the festive season with shortage of chips hurting production.
  • A welcome relief is the continued recovery witnessed in the Commercial vehicles segment. All the major players such as Tata Motors, M&M, Eicher Motors have posted positive growth for the second consecutive month. With a recovery in economic activity because of a pick up in construction and manufacturing activity, the segment did well in the month. 
  • On the positive side, the auto companies are looking forward to the festive season. Further, with several indicators such as a good kharif crop output, and the several government schemes in the social sector, the future appears positive for two-wheelers and the four-wheelers.  
  • However, resurgence of Covid infections in countries such as Malaysia and Indonesia and consequent lockdowns has led to a delay in delivery of semiconductors and other key parts to automakers in India. Hence, these could derail the recovery. 
  • Industry experts are bracing for a lacklustre festive season, with analyst forecasts suggesting a double digit drop in festive season sales this year during Navratri and Diwali. The upcoming earnings season should provide more clarity on the future outlook for these automakers.
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