Passenger Vehicle Sales Improve, Two-Wheelers Lag In December

Sales of most Indian automakers recovered in December even as uncertainties around a shortage of chips persist.

Factory-gate shipments of passenger and commercial vehicles rose over the preceding month in December, according to BloombergQuint’s poll of four analysts—Dolat Capital, Emkay Global, Prabhudas Lilladher and Motilal Oswal. Tractors however declined in a seasonally weak period, the poll showed.

“Passenger vehicle sales are faring better than two-wheelers on the back of huge order backlogs,” Prabhudas Lilladher said in a report.

Meanwhile, sales for two-wheelers remained tepid in both urban and rural pockets as higher fuel prices restricted the pace of recovery, Motilal Oswal said in its report, adding that the inventory in the system is already at 60-75 days. Higher inventory is already putting stress on two-wheeler dealerships.

Indian automakers’ business was on the decline in the years leading to the Covid-19 outbreak and a complete lockdown to contain the pandemic caused a washout last year. Then a global shortage of chips—that help control everything from the steering to emissions—stalled a nascent recovery.

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