Share of home-grown auto firms rises to a 3-year high in PV market

Tata Motors leads with a sharp jump in volume and market share

Driven by sharp increase in Tata Motors’ market share, passenger vehicle (PV) makers of Indian origin saw their pie grow to a three-year high in the overall market at the end of 2021-22 (FY22). This has come at the cost of Japanese manufacturers. 

Although they continue to get the biggest slice of the pie, their contribution has shrunk to the lowest in the same period, reveals an analysis done on the basis of the Federation of Automobile Dealers Associations’ (FADA’s) latest retail market-share data.

FADA doesn’t capture data from three states, but the market share — based on registration data — is a fair representation of the broader market trend.

The cumulative share of the Japanese PV makers — that includes Maruti Suzuki India (MSIL), Toyota Kirloskar Motor, Honda Cars India, and Nissan Motor India — dropped to 51 per cent, from 57.4 per cent at the end of 2019-20 (FY20).

The overall share of the Japanese manufacturers was dragged down by MSIL, with its share crimping 42 per cent, from 48.33 per cent, during the aforementioned period.

In sharp contrast, Indian PV makers, including Tata Motors, Mahindra & Mahindra (M&M), and Force Motors, have seen a cumulative jump of over 500 basis points in the same period — the sharpest in terms of country-of-origin-profile. 

The share of manufacturers from most countries, including South Korea, Germany, and France, either dropped or inched up marginally as they grappled with semiconductor shortage.

Among indigenous firms, Tata Motors has led the increase independently. The maker of the Safari and the Nexon models saw its retail market-share for the full year advance to 11.45 per cent in FY22, from 5.86 per cent in FY20.

The Tata group flagship — an underperformer until 2018-19 — has been reaping the benefits of a turnaround strategy undertaken by the company three years ago.  It has been cementing its position in the PV market month after month and is the third-largest in the line of dominance.

Ravi Bhatia, president and director, JATO Dynamics — a global supplier of automotive business intelligence — attributes the trend to ‘domestic original equipment manufacturers gaining with first-mover advantage in electric vehicles, as well as appealing offerings in the fast-growing sport utility vehicle (SUV) segment’. He expects the trend to continue in the current year.

Amid semiconductor shortage that chipped away at the production of its rivals, Tata Motors’ domestic volumes grew 67 per cent in FY22. 

“If not for the chip shortage, we would have done better,” Shailesh Chandra, managing director, Tata Motors PV and Tata Passenger Electric Mobility, told Business Standard, in an interaction last week. 

M&M, too, saw year-on-year increase at the end of FY22 — with its share going up to 6.86 per cent, from 5.85 per cent from 2020-21, but still below FY20 levels.

According to Puneet Gupta, director-automotive forecasting, S&P Global, Indian manufacturers have also gained due to continued presence in diesel powertrains, which still continues to control one-fifth of the market.

“In addition to a relatively weak presence in SUVs, this, too, has hurt MSIL and will continue to do so until diesel remains relevant in this market,” said Gupta.

Traditionally, Japanese manufacturers — with the exception of Toyota — have focused either on sedans or hatchbacks. Unlike Indians or South Koreans, they have been slow in capitalising on the SUV trend, said Gupta.

With planned launches in the SUV segment in the current year, MSIL may be able to recover lost ground. Given the growing competition from the Hyundai-Kia combine, recovery may not be easy, he added.