May PV sales fail to top 2018 volumes

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With the semiconductor shortage easing a bit, wholesale passenger vehicle (PV) shipments in May improved from the same month in 2019, which was a non-Covid year. However, sales were still below the level reached in 2018 when the segment was experiencing good growth. Wholesale two-wheeler shipments during the month were not only a far cry from the volumes reached three years ago, they were even lower than the numbers reached nine years ago.

Wholesale PV shipments jumped 10.61% to 251,052 units in May from 226,975 units in the same month in 2019, according to data released Friday by the Society of Indian Automobile Manufacturers (Siam). In May 2018, PV volumes stood at 301,238 units.

Although there is still uncertainty as to when the supply of semiconductors will normalize, the demand for PV remains very high. Some of the popular models, especially SUVs, have waiting periods of several months. Relatively higher ownership costs, particularly in the entry-level segment, continued to impact demand for two-wheelers with their May wholesale shipments plunging 27.36% to 1.25 million units. The shortage of semiconductors has also hurt sales of high-end motorcycles. As with two-wheelers, three-wheeler volumes fell 44.74% to 28,542 units. Total wholesale shipments, including PV, two-wheelers and three-wheelers, fell 23.52% to 1.5 million units.

“Two-wheeler and three-wheeler sales continue to remain sluggish in the month of May 2022, as they are even lower than they were 9 years and 14 years ago respectively. PV sales are also still below the 2018 level,” said Rajesh Menon, Siam’s managing director.

Menon noted that recent government interventions would help alleviate supply-side challenges, but the second repo rate hike by the Reserve Bank of India (RBI) and an increase in third-party insurance rates could become more difficult for customers, thus impacting demand.

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