The Indian automotive sector is celebrating a historic achievement, with a staggering 1.025 million cars and SUVs retailed during the 90-day festive period, starting from Onam in Kerala and concluding with Bhai Dooj across the majority of states. This festive season has not only set a new record for the industry but also positioned it as a significant contributor to India’s growing GST collection, surpassing a turnover of Rs 1.1 lakh crore.
Eight new cars were sold every minute, marking a remarkable feat for India, the world’s third-largest car market. The prolonged festive season, spanning from August to November, witnessed a surge in demand, fueled by a growing economy, increased disposable income, and a younger population. Improved semiconductor supplies played a crucial role, enabling more Indians to fulfill their dream of owning a personal vehicle.
Shashank Srivastava, Senior Executive Officer, Sales and Marketing at Maruti Suzuki, credits the extended festive period, enhanced semiconductor availability, and robust production ramp-up for the industry’s unprecedented success. The sustained demand, evident from strong booking and enquiry numbers since August, has contributed to breaking previous records.
Semiconductor Availability Boosts Deliveries:
The improvement in semiconductor availability has ensured adequate vehicle stock at dealerships, facilitating quicker deliveries to customers. Tarun Garg, COO of Hyundai Motor India, highlights the positive impact on value-seeking customers and those making spontaneous purchase decisions during festivals. Fresh bookings have remained strong, with new launches further attracting car buyers.
Rural Markets Join the Celebration:
Despite concerns about monsoon patterns, rural markets have shown significant growth, outpacing urban areas. Maruti Suzuki’s rural sales grew by 11 percent, surpassing urban growth at 9 percent. Rural sales now account for 44 percent of Maruti Suzuki’s total sales, reflecting the industry’s expanding reach into smaller towns and villages, contributing to 31 percent of total sales in 2023.
The revival of rural markets, coupled with growth in the two-wheeler segment, indicates positive signs for the entry car segment. Shashank Srivastava anticipates a comeback for the entry car segment, citing stabilized prices, improving income levels, and a normalized economy as contributing factors.
Market Growth Exceeds Expectations:
Despite challenges such as semiconductor shortages, the industry has consistently posted record monthly sales since July. The consensus among industry experts is a strong festive season will propel the passenger vehicle market to grow by 7-9 percent, exceeding earlier expectations of 5-6 percent.
Industry leaders express optimism about the growth continuing into 2023, with expectations of at least 8 percent growth. Multiple industry launches have heightened buyer interest, and while caution prevails post-festive season, the recovery trend remains positive.
Conclusion: The Indian auto industry’s record-breaking festive season sales signify not only its resilience in overcoming challenges but also the deepening connection between consumers and cars. As the industry navigates a unique phase of high base and low growth, the fundamentals of strong brands and products, coupled with a robust economy, provide a solid foundation for sustained success.