FY2021 has been one of the toughest years in the history of the Indian automotive industry, with the outbreak of the COVID-19 pandemic putting a spanner in the works. The automobile industry, which was already facing headwinds of a slowing economy, was brought to a standstill with the nationwide lockdown in April 2020. And this April, the pandemic once again threatens to spiral out of control. However, sales in Q4 of FY2021 were encouraging for the industry.
Passenger Vehicle sales in Q4 FY2021 saw a year-on-year uptick of 42.40 percent
Utility Vehicle sales registered an uptick of 12.13 percent year-on-year in FY2021
Overall PV sales in FY2021 down 2.24 percent
While the Indian automotive industry closed FY2021 with an overall (across segments) year-on-year sales decline of 13.6 percent and registered cumulative sales of 18,615,588 units (FY2020: 21,545,551), the past few months have been relatively better with Q4 FY2021 registering an uptick of 25.89 percent with total sales of 5,583,149 units (FY2020: 44,34,934).
Passenger vehicle sales in FY2021 (27,11,457 units / -2.24 percent)
The passenger vehicle segment was hit hard with cumulative sales falling to 27,11,457 units (FY2020: 27,73,519 / -2.24 percent). The biggest impact was felt by passenger cars and vans, which clocked 15,41,866 units (16,95,436 / -9.06 percent) and 1,08,841 units (1,32,124 / -17.62 percent), respectively. However, the utility vehicles (UVs) emerged as a saving grace, registering a net YoY uptick of 12.13 percent and sales of 10,60,750 units (9,45,959). Interestingly, UV sales crossed a million units in a single year for the first time, ample proof of the surging demand for this vehicle segment.
New-model launches could be attributed to have played a big role in driving this growth, wherein the need for safer personal mobility coincided with these brand-new offerings entering the market. The Hyundai Creta, Kia Sonet, Mahindra Thar and the Nissan Magnite are some of the UV models introduced last year that were in the news for all the right reasons.
However, while the PV segment was impacted by the pandemic on an annual basis, its performance in Q4 FY2021 was particularly impressive, with sales between January and March 2021 registering a strong YoY uptick of 42.40 percent and recording sales of 9,33,583 units (Q4 FY2020: 6,55,599).
Growth outlook for FY2022
So, as the Indian automotive industry gets down to strengthen its efforts of recovery even amidst rising concerns of a second wave of the COVID-19 pandemic, there is a likelihood of FY2022 emerging as a much better year for the industry overall. Still, no business guru would now hazard a guess on the long-term sector outlook.
“The Indian automobile industry continues to work hard amidst challenges of a second COVID-19 wave, to maximise production and sales, while ensuring safety of its people, partners and customers. We would like to thank and compliment the government for a massive nationwide vaccination drive and also for allowing vaccination of our employees in the factory premises,” said Kenichi Ayukawa, president, SIAM, in a press statement.
“On the sales front, a deep structural slowdown in the industry even before the pandemic, combined with the impact of the pandemic in 2020-2021, has pushed all vehicle segments back by many years. Recovery from here will require time and efforts by all stakeholders. There is still uncertainty in the value chain owing to semiconductor shortage, fresh lockdowns and increasing raw material prices. In an environment of uncertainty, instead of trying to predict the future, we will all work hard to create it,” Ayukawa concluded.