Auto sales grow 43% on low base in May; June may see demand reviving: SIAM

Automotive sales during May 2021 recorded an increase of 43 percent on account of the low base of the same month last year, as per data shared by the Society of Indian Automobile Manufacturers (SIAM).

Cumulative sales of passenger vehicles, two-wheelers and three-wheelers stood at 457,194 units during May 2021 as against 318,790 units sold during May 2020.

Commercial vehicle volumes were not shared by SIAM for the month. SIAM is the apex national body representing all major vehicle and vehicular engine manufacturers in India.

These are largely wholesale volumes, which are sold by the companies to their dealers, but Tata Motors and MG Motor issue only retail numbers that are included in the cumulative sales numbers given above.

Lockdown restrictions in May 2021 throughout the country were not as severe as in May 2020, when a nationwide shutdown meant complete halt of all production activities.

Automotive companies could keep their plants running in May this year, with some states even allowing showrooms to remain open.

Passenger vehicles comprising cars, sport utility vehicles or SUVs and vans clocked a growth of 181 percent during May 2021 at 103,226 units as against 36,698 units sold in the same month last year.

Two-wheeler volumes grew by 21 percent during May 2021 to 352,717 units as against 279,682 units sold in May 2020.

Three-wheeler volumes nearly halved to 1,251 units in May 2021, a drop of 49 percent as compared to 2,437 units sold in May 2020.

Said Rajesh Menon, Director General, SIAM: “Most part of May was under lockdown in many states thus impacting overall sales and production. Many members had shut down their manufacturing plants to divert oxygen from industrial use for medical purposes.”

Maruti Suzuki, Hyundai, Tata Motors, Renault, Nissan, Mahindra & Mahindra, MG Motor, Honda, Yamaha, Hero MotoCorp, and Royal Enfield had closed their plants in May either to rationalise inventory or due to worker unrest at their factories.

As per the Federation of Automobile Dealers Association (FADA), dealers of passenger vehicles are carrying an inventory of 20-25 days whereas those of two-wheeler makers have an inventory of 25-30 days.

All companies have predicted a strong rebound in volumes from June onwards on expectations of pent-up demand of April and May.

As per FADA, the first nine days of June saw heavier than expected retail demand at showrooms, thanks to the unlocking procedure kick-started by several states like Maharashtra, Gujarat, and Uttar Pradesh, among others.

Accelerated vaccination drives throughout the country, a strong line-up of launches, all-time low auto loan rates and a favourable monsoon are all expected to boost automobile consumption.