InvestorQ : Is Tata Motors emerging as the second largest auto company in India after Maruti?
Niti Shenoi made post

Is Tata Motors emerging as the second largest auto company in India after Maruti?

ishika Banerjee answered.
1 month ago

For a long time, Maruti has been the largest passenger car manufacturer and Hyundai India has been in second place. Things appear to be gradually changing as Tata Motors is moving to fill in the second slot. Tata Motors may not yet be there on a sustained basis but it is almost there. If you go by latest numbers, Hyundai has serious competition. Tata Motors is breathing down the neck of Hyundai and could soon overtake and get the second slot.

The PV business of Tata Motors has got a big boost by strong demand for its range of SUVs. At a time when Maruti and Hyundai were struggling hard with the timely supply of microchips, Tata Motors was much better off. Thanks to the networks built by JLR, Tata Motors had more sophisticated and de-risked sourcing of semiconductors and managed to build a lead at a time when Hyundai had to shut its factories amidst the chip shortage.

Let us look at the actual numbers in the short term. For the month of May 2022, Tata Motors reported highest monthly wholesale despatch of vehicles to dealers at 43,341 units. For the month, Tata Motors was in second spot with Hyundai in the third spot at 42,293 units. Interestingly, for the second time in last 6 months Tata Motors overtook Hyundai. However, the scenario may change once the chip shortages are addressed.

The challenge for Tata Motors will be to sustain this lead once things normalize. The top brands of Hyundai like Creta and Venue are still extremely popular and sought after in India. Once chip shortage is addressed, Hyundai is expected to recoup lost production of June and July. While Hyundai will surely regain some of its mojo, a clearer picture will emerge if one were to look at the cumulative figures of car sales rather than just the monthly sales.

If you consider the first 5 months of 2022 i.e. January 2022 to May 2022, total sales of Tata Motors in the PV segment was just about 11,000 units below that of Hyundai Motors. For example, while Hyundai sold 218,966 units of PVs, Tata Motors only slightly behind at 207,979 units. Tata Motors appears to have gained not only from demand and chip supply management but also its new product range, EV thrust and innovative process tweaks.