SUVs Take Center Stage as Passenger Vehicle Sales Shift Gears
India's passenger vehicle market is witnessing a significant shift towards sport utility vehicles (SUVs) as sales of small cars decline. In the first quarter of FY24, SUV sales grew 18% while small car sales dropped by 17.5%. Two-wheeler sales also saw a
Suv SalesPassenger Vehicle MarketSmall CarsTwo Wheeler SalesElectric VehiclesFame Iii PolicyReal Estate MumbaiJul 12, 2024
The overall passenger vehicle sales moderated to 3% year-on-year at 1.03 million units in the first quarter of FY24. However, SUVs constituted 63% of all passenger vehicle sales, with sales reaching a record high of 646,000 units in the June quarter.
The two-wheeler segment also witnessed a strong growth, with dispatches rising by 20% to 4,985,631 units in the first quarter of FY24. Scooters, in particular, posted even higher growth, driven by a recovery in entry-level two-wheelers.
SIAM president Vinod Aggarwal highlighted the need for continued infrastructure spending to boost commercial vehicle sales and stimulate the rural economy. He also emphasized the importance of incentives for electric vehicles (EVs) and a comprehensive FAME-III scheme to aid demand.
The sector expects the government to come out with a comprehensive policy to drive EV adoption, particularly in the rural areas. Aggarwal noted that the rural economy is still not doing well, and the government needs to do more to stimulate growth.
In terms of commercial vehicles, dispatches saw a moderate increase of 3.5% year-on-year to 224,209 units in the quarter. Three-wheeler wholesales rose 14% to 165,081 units in the first quarter.
With a positive outlook on the monsoon and the coming festive season, the automotive sector is poised to perform better in the balance part of the year.
On the issue of dealers seeking better inventory management from original equipment manufacturers (OEMs), Aggarwal stated that fluctuations keep happening, and the industry body does not see it as a concern.
Regarding the Uttar Pradesh government's announcement of a 100% waiver of registration fees on hybrid vehicles, Aggarwal noted that there were two different views emerging at the OEM level.
Frequently Asked Questions
What is the current trend in the passenger vehicle market in India?
The passenger vehicle market in India is witnessing a shift towards SUVs, with sales of small cars declining.
What was the growth rate of SUV sales in the first quarter of FY24?
SUV sales grew by 18% in the first quarter of FY24.
What is the current state of the rural economy in India?
The rural economy is still not doing well, and the government needs to do more to stimulate growth.
What is the FAME-III policy, and what is its significance?
The FAME-III policy is a comprehensive scheme to aid demand for electric vehicles, and it is significant for driving EV adoption in India.
What is the outlook for the automotive sector in the second half of the year?
The automotive sector is poised to perform better in the balance part of the year, driven by a positive outlook on the monsoon and the coming festive season.
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