In reverse gear: India automobile sales hit 10-year low in FY22

India's domestic sales of automobiles hit a decade low of 1.75 crore units in FY22 due to both supply and demand factors. While four-wheelers felt the pinch of chip shortages, as seen in long-waiting period for most car models, the two-wheeler segment suffered the brunt of a COVID-weakened economy.

The last time sales were lower than FY22 numbers was in FY12, when the figure was at 1.73 crore. Compared with FY21, the overall sales were down 6%.

These figures, released by the Society of Indian Automobile Manufacturers, capture despatches by automakers, and not the retail sales from showrooms.

Segment-wise, sales of passenger vehicles grew 13% to 30.7 lakh units in FY22 from 27.1 lakh units in the previous year, mainly led by a rise in despatches of utility vehicles.

Sales of utility vehicles grew over 40% to 14.9 lakh during the year from 10.6 lakh units in FY21, the best growth in any automobile segment.

Sales of commercial vehicles grew 26% to 7.17 lakh units from 5.69 lakh units in the previous year.

However, with an 11% decline to 1.34 crore units, sales of two-wheelers remained a drag on the overall figures for the industry.

Total production of passenger vehicles, commercial vehicles, three wheelers, two wheelers and quadricycles in FY22 was 2.3 crore.

March sales

In the last month of the financial year, sales of passenger vehicles fell 4% to 2.80 lakh units from 2.91 lakh units in March 2021.

Domestic sales of two-wheelers slipped by a fifth to 11.8 lakh in March from 1.50 lakh in the same month a year ago.

Passenger vehicle exports during the month grew by over 50% to 61,270 units from 40,183 units in March last year. Exports of two-wheelers were, however, fell marginally to 38,535 units.

‘Serious affordability issues’

While some segments such as commercial vehicles and SUVs are seeing improvement in demand, the mass segments such as two-wheelers and smaller cars are facing serious affordability issues, said SIAM President Kenichi Ayukawa.

Despite some recovery from a low base, sales of all four segments of the auto industry are below even FY19 level. The immediate challenge in most segments is semiconductor availability.

SIAM said the growth in passenger vehicles, commercial vehicles and three-wheelers was due to a low base of the industry in 2020-21.

All segments are facing supply-side challenges and the industry is yet to see complete recovery following the disruptions it has been facing since early 2020, said SIAM Director General Rajesh Menon.