Car sales up in April even as chip crunch hurts Maruti

Passenger vehicle shipments in the local market grew in double-digits year-on-year last month with most automakers ramping up supplies to dealerships even as limited availability of semiconductors partially impacted production operations of market leader Maruti Suzuki.

Industry estimates show 331,747 vehicles were dispatched from factories to dealerships in April, up 12.9% from 293,821 units sold in April 2022, as carmakers built up stock in the network.

Retail sales of passenger vehicles increased by a modest 3.5% on year to 285,700 units last month, estimates show.

Automakers in India largely report wholesale volumes billed to dealers and not retail sales to customers.

Maruti Suzuki grew volumes by 12.6% to 137,320 vehicles last month. The shortage of electronic components had some impact on the production of vehicles, the company said, adding, it took “all possible measures to minimise the impact”.

“We were constrained by availability of semiconductors last month because of which we lost some volumes of models like Brezza, Grand Vitara and Ertiga,” said Shashank Srivastava, senior executive director (marketing and sales) at Maruti Suzuki. The company has pending bookings for 373,000 vehicles.

While the company saw an increase in enquiry levels on account of introduction of new SUVs Fronx and Jimny, there are some concerns on the demand side due to continued high rate of inflation and possible weakening of consumer sentiments in rural markets due to forecasts of less favourable monsoon rains, Srivastava said.

“There are mixed signals as far as demand parameters are concerned. Our enquiry levels have gone up, but bookings are lower. We have to wait and watch how the market evolves going ahead,” he said.

On the positive side, the recent rationalisation of CNG prices has started supporting demand for vehicles powered by the fuel. The share of CNG in overall sales of passenger vehicles increased to 12.3% in April, from 11% a year earlier.