Auto sales in the final three months of 2021 will be remembered for the solid out-performance of Tata Motors during the period, boosted by one key model — the affordable, mini SUV Punch.
The strong numbers racked up by the entry-level UV have helped Tata Motors overtake Mahindra & Mahindra in the compact utility vehicle category, while also hurting sales of both Maruti Suzuki and Hyundai Motor India.
The October launch of Punch — an affordable, low-end quasi SUV — has lifted Tata Motors’ presence in the compact UV segment to a completely different orbit.
During the final three months of 2021, Tata Motors sold a whopping 55,397 compact UVs in India, with just two models — Nexon and Punch.
While the breakup between these two is not available, data suggests that Nexon and Punch are selling around 10,000 units per month each.
Before the launch of Punch, Tata had sold 29,504 Nexons in the three months ended September. With the addition of the Punch in late October, that number has zoomed by nearly 26,000, suggesting a split of 10k each per month between the two models.
In comparison, Mahindra & Mahindra has been selling around 13,000 units of compact UVs per month. This comprises around 3,000 units of Thar, 6,000 Boleros and around 4,000 XUV300 per month.
Though the arrival of the Punch, which combines sporty looks with an affordable price tag and the trust of the Tata brand, poses no direct threat to the three M&M models, it has nevertheless allowed Tata to overtake M&M in the compact UV category.
IMPACT ON MARUTI SUZUKI, HYUNDAI
The real price for the early success of Tata Punch seems to be being paid by market leader Maruti Suzuki and No.2 Hyundai Motor India.
This is because the Punch, despite being categorized as compact UV, is priced more like a hatchback — a segment that is bread and butter to these two automakers.
Maruti Suzuki, for example, has been posting unexpectedly weak monthly sales numbers ever since Punch launched, though much of it has to do with semiconductor shortage.
October sales of Swift, for example, were down 63% at 9,180 units, while those of Dzire fell 54% to 8,077.
However, even by December — when Maruti Suzuki had more or less completely recovered from the impact of semiconductor shortage — it saw a decline of around 11% in the sales of its ‘compact’ segment that comprises the direct competitors of Punch — Swift, Dzire, Celerio, Baleno and WagonR. This was unexpected, given that the semiconductor shortage of previous months was supposed to have led to a pile up in orders.
Even Hyundai Motor seems to have been hurt by the increasing popularity of Tata models, in addition to the chip shortage.
The company’s total car sales in India fell to just 1.06 lakh for the three months ended December, from 1.53 lakh in the same period of 2020 and 1.28 lakh in the preceding three months (July-September 2021).
Meanwhile, all this is translating to decade-high sales for Tata Motors’ passenger car division, which has come within spitting distance of the No.2 spot traditionally occupied by Hyundai. However, just how sustainable the uptick remains depends on how far the Punch is able to live up to consumers’ expectations.