India's total Passenger Vehicle (PV) sales grew by 8.4 percent year-on-year to 42.18 lakh units for the fiscal year 2023-24 on the back of robust demand for Utility Vehicles (UVs), according to the data shared by the Society of Indian Automobile Manufacturers (SIAM). Total PV dispatches stood at 38.90 lakh units in fiscal year 2022-23.
Despite rising commodity prices and increase in vehicle costs, several factors such as improved supply of semiconductor chips and stronger economic growth resulted in higher vehicle offtake, according to SIAM.
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Total vehicle wholesale across categories stood at 2.38 crore units in FY24, which was 12.5 percent higher than 2.12 crore units recorded in FY23, as per the SIAM data. Exports, however, saw a decline of 5.5 percent at 45 lakh units last fiscal, as compared to 47 lakh units in FY23.
Numbers shared by auto industry body also revealed that total two-wheeler wholesale data in FY24 was at 1.79 crore units, 13.3 percent higher than the FY23 figure of 1.58 crore units.
According to Vinod Aggarwal, President, SIAM, a robust GDP growth of 7.6 percent for FY24 has enabled the automobile industry to post a 'satisfactory performance', with domestic industry growing by 12.5 percent during the last financial year.
Total vehicle dispatches across categories were at 18.62 lakh units last month, as compared with 16.37 lakh units in March 2023 (up by 13.8 percent).
UVs command major slice of PV pie
Utility Vehicles (UV) contributed to nearly 60 percent of the total PV sales during last fiscal at 25.2 lakh units as compared to 20 lakh units sold in FY23, the SIAM figures show. The total UV sales in the domestic market went up by 25.8 percent on a year-on-year basis.
Furthermore, total PV dispatches during March 2024 stood at 3.68 lakh units, up by 9.5 percent YoY, as against 3.36 lakh units last year. Out of total PVs sold in March, UVs’ share was 61.14 percent at 1.94 lakh units last month.
According to SIAM President Vinod Aggarwal, the PV segment led the growth with overall sales touching almost 50 lakh units, including 42 lakh in domestic sales and around 7 lakh export units.
When asked to shed some light on the decline in sales of Passenger Cars (sedans and hatchbacks), Aggarwal stated: “We should look at the overall PV (sales), which grew by 8.4 percent last year rather than looking at at any specific segment SUVs of the market. Within the passenger vehicle space, there is more preference for the Utility Vehicles rather than passenger cars.”
He also said that people are increasing migration from passenger cars to UVs.
“Within passenger cars, entry-level products have dropped more (than other segments). So if some people are not buying such (kind of) cars, that gives more potentialities for their growth once the rural economy revives. Therefore, I would look at it positively that there is more potential for growth as we see more growth in the income levels of entry-level car buyers in the rural economy," added Aggarwal.
In his view, the two-wheeler segment continued the recovery path with a handsome growth of over 13 percent in domestic sales to almost 1.80 crore units, even though still lower than the earlier peak of 2.1 crore units in FY19. The total two-wheeler domestic wholesales were at 14.87 lakh units last month, as against 12.90 lakh units in March 2023.
CVs see marginal growth
Meanwhile, the domestic Commercial vehicle (CV) industry had a marginal growth to 97 lakh units and within that, Light Commercial vehicles (LCVs) and small commercial vehicles (SCVs) saw the numbers dropping due to degrowth in the CNG segment.
“The growth in commercial vehicles was also impacted due to migration to higher tonnage trucks which created higher payload capacity, which is not reflected in the number of units, stated Aggarwal, who is also the Managing Director and Chief Executive Officer of VE Commercial Vehicles Ltd (VECV).
In the three-wheeler segment, he said the industry is almost close to the earlier peak of 7 lakh units in FY19.
On sales outlook for the current fiscal, the SIAM president said the auto industry remains optimistic as the macroeconomic outlook remains positive.
"Coupled with a good monsoon outlook, we are expecting continued growth for the industry this year as well. The industry may see single-digit growth in the current fiscal,” said Aggarwal.
He also indicated that that there could be some slowdown in the overall market due to the “upcoming Lok Sabha elections” but that is expected to lead to a robust pent-up demand in the rest of the year.
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