PV wholesale is in slow lanes; Two- and three-wheeled vehicles grow on a low base

Wholesalers for two-wheelers and three-wheelers recorded annual growth in April, thanks to a lower base. However, the passenger vehicle (PV) segment remains red, indicating that OEMs are still not far from the chip shortage.

Two-wheeler and three-wheeler sales rose 15.4% and 51.1%, respectively, while PVs grew 3.8% in April, according to data released by SIAM on Wednesday.

April PV wholesale volume of both Maruti Suzuki and Hyundai Motor India declined by 10.2%.

Rajesh Menon, Director General of SIAM, said: “Sales of passenger vehicles are still below the April 2017 figures, whereas two-wheelers are below the April 2012 figures. Three-wheelers have not yet reached normal levels as sales are still less than 50% of the April 2016 figure. “

In a research note, ICICI Securities said PV OEMs are slowly increasing production as chip delivery improves as volume rebounds continue, focusing on the launch of CNG variants and upgrades to popular models such as Tigor, Brezza, Nexon and Baleno.

Arun Agarwal, Deputy VP, Kotak Securities, said: “The April 2022 wholesale volume reported by automobile manufacturers saw a mixed performance where some parts were partially affected by supply-side constraints. In the two-wheeler segment, most companies reported growth, but less so. Sales of the passenger vehicle segment have been affected due to supply chain problems. However, in the passenger car segment, the performance between the players varies significantly. “
According to SIAM, the total production of passenger vehicles, two-wheelers and three-wheelers in April 2022 was 1,874,461 units, which was 1,875,872 in April 2021, registering a marginal decline.

“Manufacturers are working hard to manage supplier ecosystems with agility and flexibility as supply-side challenges continue for the industry. In addition, manufacturers are also looking at the potential impact of the recent repo rate hike on demand, as it will increase consumer borrowing costs, ”Menon said.

Kotak Securities said in a note that the volume performance of the auto segment in April was partially affected by supply side constraints and the domestic PV segment also continued to suffer. In the domestic two-wheeler segment, the volume of industry has increased on an annual basis (partly due to lower base). However, the numbers reported for the domestic market fell short of expectations. Even in some states the demand has increased due to the wedding season, the overall demand trend has remained muted, it added.