Domestic car sales in last financial year grew by nearly 9% to a record 4.23 mn units – The Economic Times

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Car sales in the local market in the last financial year grew by nearly 9% to a record 4.23 million units amid improved supplies and sustained customer demand, cementing India’s position as the third largest market for passenger vehicles in the world.
Around 370,000 cars, sedans and utility vehicles were sold last month, compared to 336,000 units in the year-ago period, making it the 15th consecutive month that PV sales have breached previous monthly records.

“This is the first time that passenger vehicle sales in the domestic market crossed the 4 million mark”, Shashank Srivastava, member executive committee at the country’s largest carmaker Maruti Suzuki, said, adding, sales were driven by demand for SUVs, which for the first time accounted for half of all vehicles sold in a fiscal year. The share of SUVs in total sales rose to 50.4% last fiscal from 43% in FY23.

Small car sales continued to slump with the share of hatchbacks declining to 28% last fiscal, from about 34% in the previous year. The share of sedans too slid to in the year under review by more than 100 basis points to 9%.

Maruti Suzuki – which introduced a slew of vehicles in the fast-growing segment from Fronx to Grand Vitara – saw domestic sales increase by over 9% to 1.76 million units in the year under review. The company’s share in the SUV segment nearly doubled to 21%, from 11% in FY23. In March, Maruti Suzuki sold 152,718 units vehicles, which is an increase of 15% over the same period last year.
Automakers in India mostly report wholesale dispatches from factories and not retail sales to customers.

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Korean auto major Hyundai Motor India too saw best-ever annual sales last fiscal. In the domestic market, Hyundai’s sales surged by 8.3% to 614,721 units in 2023-24. Hyundai Motor India Chief Operating Officer Tarun Garg said, “The demand momentum in the market is positive. However, given that the industry has registered two straight years of record sales, the growth rate will now moderate, on a very high base.” PV sales are expected to grow in low single-digits – by about 3% – in the ongoing financial year.

Homegrown auto major Tata Motors grew sales by 6% to 573,495 units. Meanwhile, at Mahindra & Mahindra (M&M) monthly sales rose 13% to 40,631 units. The company’s sales for the entire fiscal grew 29% to 459,864 units.

“With sales of cars powered by traditional fuels (petrol and diesel) flattening, almost the entire incremental volume growth of FY24 is expected from rising sales of emission-friendly powertrains. EV and CNG segments are projected to post robust growth of 70% and 55% respectively in FY24 vs FY23, on the back of multiple new launches, growing charging infrastructure and CNG stations, significantly lower operating costs and growing consciousness among customers to be environment friendly”, Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility informed.

Chandra added going forward, the company expects demand for passenger cars to remain strong, although the high base effect may keep the growth rate in single digit. He said, “Customers’ rising preference for safe and green vehicles should result in double digit growth for sale of cars with emission-friendly powertrains supported by new launches and a stronger value proposition – emission-friendly, lower total cost of ownership and equipped with smarter features.”

Japanese automaker Toyota Kirloskar Motor (TKM) sold 25,119 units last month to close the fiscal year with record sales of 263,512 vehicles. “In 2023, we expanded our annual production capacity by almost 32,000 units to meet the growing demand. Additionally, we made new investments of Rs 3,300 crores, which will further enhanced us to gear up for our next phase of business expansion duly incorporating technological transformation in achieving carbon neutrality goals”, Sabari Manohar – Vice President, Sales-Service-Used Car Business, Toyota Kirloskar Motor said.

MG Motor India sold 4,648 units last month. Total sales for the year increased 14% to 56,000 units.

In the commercial vehicle segment, demand remained muted with market leader Tata Motors reporting a fall of 4% in sales to 378,060 units. Rival Ashok Leyland saw volumes rise by a modest 1% to 182,830 units in FY24.

Girish Wagh, Executive Director, Tata Motors said, “FY24 began on a promising note for the commercial vehicles industry with the industry expecting to scale the previous volume peak achieved in FY19. The trend of YoY sales growth in volumes across most segments of H1FY24 moderated in H2 due to the combined effects of a high base, elections held across 5 states in Q3FY24 and upcoming General Elections in Q1FY25.

Going forward, with promising GDP growth outlook, incentives from government to improve productivity in both manufacturing and agriculture sectors, and continuing focus on infra related developmental projects, demand for commercial vehicles is expected to improve from the latter half of Q2FY25. “We remain cautiously optimistic about domestic demand while keeping a close watch on geopolitical developments, interest rates, fuel prices and inflation”, Wagh informed.

In the two-wheeler segment, market leader Hero MotoCorp grew volumes by 5% to 5.42 million units last fiscal. Suzuki Motorcycle India sold 921,009 units in the same period – an increase of 26%. At Royal Enfield domestic sales grew by 14% to 834,795 units in FY24.

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