Amit Panday
New Delhi: The passenger vehicle segment is expected to record sales of up to 32.9 lakh units during the ongoing fiscal, Shashank Srivastava, executive director, Maruti Suzuki India Ltd, said at the Today News 24panel discussion – ‘Recap FY21 and Mission FY22’ – on Wednesday.
“We are forecasting passenger vehicle sales of around 31.5 lakh to 32.9 lakh units this year, which would still be a growth of just about 20%,” Srivastava said, adding, “We should not be looking at the YoY growth due to low base of last year. Even if the passenger vehicle sales grow as projected this fiscal, we would still be far away from the peak of FY2018-19.”
The forecast by the country’s largest carmaker comes after the passenger vehicle sales declined by 18% in 2019-20 to 27.73 lakh units due to the unprecedented slowdown and by 2% in 2020-21 to 27.11 lakh units because of the pandemic-led disruptions.
The passenger vehicle industry had recorded a cumulative production and domestic wholesales of more than 40 lakh units and 33.77 lakh units respectively in FY19.
Srivastava, however, warned that the supply shortage of parts amid rising COVID-19 cases across the country and negative consumer sentiments remain as potential threats to the projections for this year.
“Going forward, we continue to have healthy bookings. The industry stock is about 130,000 units, which is very low considering that the retail sales have been close to 300,000 units a month over the past few months. The supply side challenges, amid the rising COVID-19 cases, continue to pose a threat,” he said.
As India is witnessing the second wave of COVID-19 cases with a sharp spike in the fast spreading infection, vaccine shortage is reported across regions and several states are beginning to impose partial lockdowns. While the automotive industry executives worry about the impact of lockdowns on the smooth functioning of industrial clusters and supply chains, no temporary plant shutdown by the manufacturers has been reported so far.
However, reverse migration of daily-wage workers has commenced from large cities including Mumbai and Delhi among others. Executives say that the companies are evaluating the potential impact of such people movement from industrial clusters in the near future.
Meanwhile, earlier this month, the International Monetary Fund (IMF) had issued a revised forecast for India that entails a GDP growth of 12.5% in 2021-22, which Srivastava believes augurs well for the passenger vehicle industry.
“The demand for passenger cars is closely correlated with the GDP growth per capita. However, the problem with automotive is that in economic terms we call it a discretionary product, which requires consumer sentiments to be positive,” he said.
“We are taking one day at a time, month-by-month during this COVID-19 situation. Consumer sentiments have a disproportionate impact on car sales. While a positive sentiment can lead to irrational growth in sales, negative sentiments can lead to an equally irrational drop (in sales). If everything goes well, we will probably see a really good H2FY22,” Srivastava said.
