The Indian automobile industry is revving up for a spectacular festive season in 2023, with passenger vehicle wholesales hitting record highs in September. As the country gears up for a series of festivities, automakers are dispatching unprecedented stock levels to meet the soaring demand. In this report, we’ll delve into the significant milestones achieved, trends, and prospects that the automotive sector is witnessing as it prepares to shine during the festive season.
In September 2023, passenger vehicle wholesales in India reached an all-time high, surging to an impressive 3,63,733 units. This remarkable feat reflects the industry’s proactive approach to catering to the robust demand emanating from the ongoing festive season. The previous best was registered in August 2023, with dispatches of 3,60,700 units.
“This September marks a historic milestone in the Indian passenger vehicle industry. It not only surpasses all previous Septembers but also sets a new benchmark for monthly sales,” emphasized Shashank Srivastava, Senior Executive Officer (Marketing and Sales) at Maruti Suzuki India.
Festival Fervor and Chip Supplies
The surge in dispatches during September can be attributed to multiple factors. Firstly, dealerships have been gearing up for the festive season, which traditionally kicks off in grand style from October 14. Secondly, western and southern states witnessed robust demand due to various festivals, significantly boosting car sales.
Furthermore, the availability of cars improved as chip supplies began stabilizing. This played a pivotal role in enabling automakers like Maruti Suzuki, Hyundai, Toyota, and Mahindra & Mahindra to report their highest-ever monthly wholesales, responding to the fervent demand spurred by the festive season.
Positive Outlook for the Industry
Shashank Srivastava also revealed that these wholesales marked a significant milestone for the passenger vehicle industry in the April-September quarter. For the first time in nine months, the industry’s sales crossed the 30-lakh unit mark. This indicates a promising trajectory towards reaching 40-lakh unit sales for both the financial year and the calendar year.
Furthermore, the industry made history by breaching the 20-lakh unit sales mark in the April-September period, highlighting sustained growth.
Key Automakers’ Performances
Maruti Suzuki India, the nation’s largest carmaker, reported a 3% year-on-year increase in total wholesales, reaching 1,81,343 units in September, an all-time high. This surpasses the 1,76,306 units dispatched during the same month last year.
Hyundai Motor India, the second-largest car manufacturer, witnessed a 13% year-on-year growth in total wholesales, totaling 71,641 units in September, the highest ever in a single month. Domestic sales also saw a 9% uptick.
Toyota Kirloskar Motor recorded a remarkable 53% year-on-year increase in total wholesales, reaching 23,590 units, the highest-ever for the company in a month.
Tata Motors, on the other hand, reported a 2% rise in total domestic vehicle sales, reaching 82,023 units in September, including electric vehicles.
MG Motor India reported a significant 31% year-on-year growth in retail sales, with 5,003 units sold in September 2023.
Festive Season: The Game Changer
The festive season in India traditionally accounts for approximately 23%-26% of the auto industry’s annual sales volume. This year, it is projected to contribute around 10 lakh units to the industry’s expected total sales of 41 lakh units for the fiscal year. While the festive season dispatches have been strong in previous years, this year’s demand surge stands out as exceptional.
The increased momentum can be attributed to a variety of factors, including pent-up demand following the COVID-19 pandemic, better chip supply stability, improved economic conditions, and multiple new model launches, particularly in the SUV category.
Outlook Beyond Festive Season
As the festival season progresses, the Indian automotive industry anticipates even stronger growth. However, the industry remains vigilant about post-festive season demand and potential inventory challenges. While the passenger vehicle segment appears poised for double-digit growth, two-wheelers may experience slower single-digit growth.
In conclusion, the Indian automobile industry is on an exciting journey as it gears up for the 2023 festive season. With record-breaking wholesales, promising outlooks, and a resilient spirit, it is set to shine brighter than ever.
Rural Sentiment and Final Thoughts
Rural growth is expected to outpace urban growth, driven by a higher festival fervor in smaller towns and an increased preference for entry-level cars during the festive season. The industry remains cautiously optimistic about the challenges posed by fluctuating monsoons and their potential impact on food inflation and rural sentiment.
As the festival season unfolds and automakers navigate evolving trends, the Indian automobile industry remains a dynamic and resilient force, ready to embrace the opportunities and challenges that lie ahead.