Low interest rates, pent up demand buoy Feb auto sales
Low interest rates along with pent-up demand and ongoing discounts accelerated the year-on-year sales of major automobile players’ during February.
Analysts cited factors such as preference for personal mobility over public transport due to the pandemic as the other key reasons for the upswing.
Besides, higher government spending in the infra space was credited to have given a push to the commercial vehicle segment.
Accordingly, automobile major Maruti Suzuki reported a growth of 11.8 per cent in its overall sales during February 2021 on a year-on-year basis.
The company sold 1,64,469 units of vehicles last month, against 1,47,110 units sold in February 2020.
On a sequential basis, the company sold 1,60,752 units of vehicles in January 2021.
The other major passenger vehicle player — Hyundai Motor India — reported a growth of 26.4 per cent in its overall sales including exports during last month.
The company’s overall sales grew to 61,800 units from 48,910 units sold during February 2020.
Besides, Tata Motors’ overall sales in the domestic and international market for February 2021 stood at 61,365 units from an off-take of 40,619 units sold during February 2020.
The company’s domestic sales increased to 58,473 units last month from 38,002 units sold during the corresponding month of last year.
“February 2021 sales have been the highest ever sales for Tata Motors PV in nearly 9 years (107 months),” the company said in a statement.
Another automobile major Mahindra and Mahindra reported overall auto sales of 28,777 units from 32,476 units in February 2020.
In the utility vehicles segment, Mahindra sold 15,380 vehicles in February 2021, compared to 10,675 vehicles in February 2020, registering a growth of 44 per cent.
The passenger vehicles segment sold 15,391 vehicles in February 2021, a growth of 41 per cent over same period last year.
In terms of the two-wheeler segment, Hero MotoCorp reported a rise of 1.45 per cent in its total sales during February.
The company sold 505,467 units of motorcycles and scooters last month from an off-take of 498,242 units in February 2020.
In addition, Honda Motorcycle & Scooter India’s total sales for February rose 29 per cent to 442,696 units last month as compared to 342,021 units sold last year.
The company’s domestic sales grew 31 per cent to 411,578 units last month as compared to 315,285 units sold last year.
Parallely, Honda’s exports grew 16 per cent to 31,118 units with its BS-VI models exports gaining momentum in new overseas markets as well.
“Domestic automobile sales continued on the growth trajectory, supported by improved consumer sentiment and benign financing environment. Moreover, inventory restocking at dealerships, especially in the PV segment, has resulted in healthy volume growth during the month,” said Ashish Modani, Vice President, Co-Head, Corporate Ratings.
“Domestic M&HCV volume has also witnessed smart recovery over the last few months, with most OEMs registering healthy YoY growth during Feb-2021. Given the low base of Mar-2020 when dispatches were impacted by Covid-19 induced lockdown, the domestic automobile industry is likely to witness strong volume growth in Mar-2021 as well.”
According to Sridhar V, Partner, Grant Thornton Bharat LLP: “All passenger vehicle OEM’s have exhibited buoyancy in growth of wholesale numbers in February, with some of the OEM clocking their highest sales.”
“This is a reflection of fairly consistent demand and also aggression on the part of OEM in keeping the momentum on by having new introductions. All this amidst the challenges in certain part supplies looks positive for this segment.”
In addition, Preetam Mohan Singh, Senior Vice President, Automotive, Praxis Global Alliance said: “There is an 11 percent increase (YoY) in PV sales while 2W sales showed an upward trend of 6.6 percent. But 3W sales took a downwards spiral with a degrowth of 50.76 percent (YoY). While the demand buoyancy is there, the industry is affected adversely through supply chain challenges including the rising price of steel, unavailability of semi-conductors, and higher container charges.”
“There is a lot of demand for connected cars and the future outlook is expected to be reasonably good with the Holi festival pushing demand up but the overall sentiment may be dampened if Covid cases surge up and petrol prices are not rationalised.”