Vehicle production surges due to improved chip supply

The Indian automotive industry witnessed an 8% surge in vehicle production, propelled by enhanced semiconductor chip supplies. Three-wheelers recorded a notable growth of 20%, while passenger vehicles followed closely with a 16% increase.

In May, the Indian automotive industry experienced an 8% growth in vehicle production across categories, driven by improved semiconductor chip supplies. Three-wheelers led the pack with a 20% increase, followed by passenger vehicles at 16%.

However, exports faced challenges due to political and economic turmoil in markets like Nigeria, resulting in a 21% overall dip. Passenger vehicle exports declined by 6.4%, three-wheeler exports fell by approximately 7%, and two-wheeler exports were severely impacted, down by 21%.

On the domestic front, the industry achieved record-high May wholesales of domestic passenger vehicles, reaching 334,802 units. The surge was attributed to strong demand for sport utility vehicles (SUVs) and improved semiconductor chip availability.

According to data from the Society of Indian Automobile Manufacturers (SIAM), passenger vehicle production grew by 16% YoY to 345,567 units. Three-wheeler production increased by 20% YoY to 71,649 units, while two-wheeler production rose by 6% to 1,706,654 units.

The rise in production compared to May 2022 indicates a gradual easing of semiconductor chip shortages. Bookings in the domestic auto industry also witnessed a 10% YoY increase, while enquiries jumped by 17% YoY.

Mahindra and Mahindra (M&M) experienced a 30% growth in production and 22% growth in sales. Hyundai’s production increased by 10%, and Toyota recorded a seven-fold growth. Toyota Kirloskar Motors (TKM) achieved its highest-ever May sales with an impressive 88% increase.