Around 345,000-346,000 vehicles are expected to be sold in the domestic market by the close of this month, compared with 342,000 units a year earlier. This would be the highest July sales on record in the Indian market. The highest monthly passenger vehicle sales were 355,000 units, recorded in September 2022.
Senior industry executives ET spoke with are optimistic about the growth prospects. A slew of new launches in the fast-growing SUV segment from Maruti Suzuki to Hyundai and Honda, coupled with increasing demand in rural markets, is expected to support the sales momentum as the country heads into the festive season and help the industry top the 4-million mark for the first time in a fiscal year. The festive season will commence with Onam in Kerala towards the end of August.
“There have been a lot of new launches over the past couple of weeks which helped excite and sustain demand in the market,” said Shashank Srivastava, senior executive officer (marketing and sales) at market leader Maruti Suzuki. “Rural demand is looking reasonably good. Though the growth rate now on will be lower, on a high base of last year, the industry should be able to cross the 4-million-mark in sales in the full year.”
Even though pent-up demand is no longer there, carmakers are seeing healthy traction in the market, said Tarun Garg, chief operating officer at Korean auto major Hyundai. “New customers are coming in. The semiconductor shortage is more or less behind us. We (Hyundai) should be able to grow in double digits.”
To be sure, macroeconomic fundamentals in the country remain strong. India’s FY24 growth forecast was recently revised by ratings firm Fitch to 6.3%, from the earlier 6%, on the back of robust near-term momentum and better-than-expected first-quarter results. This even as Germany, Europe’s largest economy, officially entered recession in the first quarter. Standard Chartered has predicted that the US will see recession in early 2024 amid severe inflationary pressures.Atul Sood, associate vice-President (sales and strategic marketing) at Toyota Kirloskar Motor (TKM), said the economic indicators have been good with positive projections for the rest of the year, which made the industry buoyant.“Strong demand has sustained from across the country with a surge in semi-urban and rural markets. We also see aggressive penetration efforts by OEMs (automakers). Multiple launches across new segments are fuelling the demand,” Sood said.
The company’s sales volume has already grown by a third in the first quarter and it expects to post robust sales in the upcoming festive season.
Passenger vehicle sales grew 27% to 3.89 million units in FY23. These are wholesale numbers, as automakers in India mostly do not report retail sales to customers.