India: Semiconductor shortage continues to be speed breaker for auto sector

Wholesale dispatches by Indian automakers remained low for the third month in a row in Nov'21. The festive season failed to drive sales as the automobile industry continues to battle supply-side challenges due to the ongoing semiconductor shortage.

Also, production cuts announced by auto companies since Aug'21 have resulted in lower dispatches.

Maruti Suzuki India Ltd (MSIL), the largest passenger vehicle manufacturer, has clocked a 7% decline in domestic sales at 1,09,726 units in November with electronic components' shortage impacting production. The company sold a total of 1,53,223 units in the same month last year.

The semiconductor shortage primarily affected the company's production of vehicles sold in the domestic market. However, MSIL is taking all possible measures to minimise the impact.

The company currently has pending orders of around 2,50,000 units with demand in the market continuing to be buoyant, while its production was over 80% in November.

Hyundai Motor India Ltd (HMIL) registered domestic sales at 37,001 units in November, down marginally by 0.50% m-o-m. The wholesale numbers remained flat versus Oct'21. Also, the company sold 59,200 units in the same month last year. Exports declined 5% to 9,909 units last month compared to 10,400 units in Nov'20.

Sales in November have been affected on account of the ongoing semiconductor shortage scenario, the company stated.

Honda Cars India Ltd (HCIL), the leading manufacturer of premium cars in India, registered monthly domestic sales of 5,457 units in Nov'21, down 49% m-o-m. HCIL also exported a total of 1,447 units last month. The company registered 9,990 units in domestic sales in the corresponding period last year.

Tata Motors' total domestic wholesales were down 11% m-o-m to 58,073 units in November. In terms of passenger vehicles, the company retailed 29,778 units in the last month, registering a growth of 38% over the previous year's 21,641 units. The automaker posted a 21% y-o-y increase in its domestic wholesales last month compared with 47,859 units in the year-ago period.

Bajaj Auto sold 1,58,755 vehicles in November, a decrease of 38% on a monthly basis. A decline in rural incomes, a segment which continues to reel under the impact of Covid-19, cast a shadow on sales of two-wheeler manufacturers.

TVS Motor Company's wholesale dispatches posted a sharp decline of 32% m-o-m at 1,76,693 units in November while motorcycle sales remained flat compared to Nov'20.