Passenger vehicle demand improves, two-wheelers in red in December 2021

The year 2021 remained one of the most challenging times for the Indian auto industry. After the shocking 2020, the year 2021 too witnessed mixed sales performance from the Indian auto sector. The mixed sales performance continued even in the last month of the last year.

The improved consumer sentiment, reviving economy, growing vehicular and economic activity at large helped the auto sector to post an improved sales picture in 2021, as compared to 2020. However, the supply chain crisis including the semiconductor shortage that impacted the global auto sales reduced production numbers for the auto industry and eventually hurt sales as well.

In the passenger vehicle segment, it was a mixed result from the brands. While the two biggest car brands of the country, Maruti Suzuki and Hyundai registered 12.6 per cent and 31.8 per cent sales decline last month, as compared to their respective December 2020 sales performance, the rest of the passenger vehicle brands such as Tata Motors, Mahindra & Mahindra, Kia, Nissan, Skoda recorded positive sales numbers.

A number of new models launched in India have helped the automakers to post upbeat sales performance in December 2021. The increased preference for personal mobility, easy finance options, improved consumer sentiment helped the automakers to post their sales figures in green last month, as compared to December 2020.

The two-wheeler segment on the other hand, which witnessed an upbeat sales momentum when other segments were in red in 2020, remained in negative in December 2021, majorly due to the slow revival of sales in the rural market, which was impacted hard due during the second wave of the pandemic. Major two-wheeler brands like Hero MotoCorp and TVS reported a sales slump in December 2021, as compared to their respective December 2020 sales numbers.

While the slow recovery in the rural sector was one reason, other key reasons that impacted recovery in the segment included sky-high fuel price, the higher price of motorcycles and scooters etc. These subdued the price of entry-level motorcycles and scooters particularly, which generate volume for the industry. The rising cases of the Omicron variant of Coronavirus are expected to continue the impact in the segment in the coming months.

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