The passenger vehicle sales gained momentum in the April-June quarter of FY24, and crossed the crucial two million mark, according to the Society of Indian Automobile Manufacturers (SIAM). The total passenger vehicle domestic sales surged 9.4% to 9,95,974 units in Q1 of FY24 as against 9,10,495 units sold in the same period last year. The industry produced 11,37,193 units of passenger vehicles and exported 1,52,516 units in the first quarter of this fiscal. Of this, the sales of utility vehicles stood at 5,46,603 units, up 17.6% as against 4,64,556 units in the same period last year. 

"In the quarter, the Auto Industry seamlessly transited to the very stringent BS 6 Phase 2 Emission Norms from 1st April 2023, reflecting the commitment of the Industry towards the environment. Overall passenger vehicles, two-wheelers, three-wheelers and commercial vehicles have performed well in Q1 of 2023-24, although some sub-segments have shown a slight momentary decline, compared to Q1 of last year. With expectations of a reasonable Monsoon, which has now covered most parts of the country, coupled with lowering inflation, we expect the economy to continue to grow, which in turn should help the Auto Sector. High-interest rates remain a concern," says Vinod Aggarwal, President, SIAM.

Maruti Suzuki India Limited led the passenger vehicle sales in the quarter under review. The country’s largest automobile manufacturer sold 4,14,055 units, up 12.1%, as against 3,69,154 units in the same period last year. This was followed by Hyundai Motors India which sold 1,48,303 units in the April to June quarter. Tata Motors, and Mahindra and Mahindra sold 1,43,082 units and 1,00,172 units of passenger vehicles, respectively.

During the quarter under review, the sales of commercial vehicles, however, declined by 3.4% to 2,17,046 units as against 2,24,488 units sold in the same period last year. The sales of two-wheeler and three-wheeler vehicles were up by 11.1% and 89.3%, respectively. In the April to June quarter, two-wheeler sales stood at 41,40,964 units, whereas sales of three-wheeler vehicles stood at 1,44,475 units.

"Sales of Passenger Vehicles in Q1 of Apr-June 2023 has been the highest ever with a growth of 9.4%, compared to the previous year. The Passenger Vehicle segment crossed 2 million units in the first half of the Calendar year for the first time. Two-Wheelers also posted a growth of 11.2% in this Quarter, compared to last year, but are still lower than 2016-17 levels. Domestic sales of Three-Wheelers in Q1 of 2023-24 grew by 89.4% compared to last year albeit on a low base, but are still lower than the 2018-19 levels. Commercial Vehicles have de[1]grown by (-)3.3% in this Quarter, compared to Q1 of last financial year," says Rajesh Menon, Director General, SIAM.

Analysts at Nomura expect the growth in the passenger vehicle segment to remain subdued at approximately 6% year-on-year (YoY) in FY24. "We continue to expect subdued PV industry growth at ~6% y-y in FY24F. As inventory has improved to 3-4 weeks (~40 days for small cars), discounts have risen as well; waiting periods for popular cars are shortening as supply chain constraints improve. The competitive intensity remains high across SUVs and CNG. In 2Ws, rural recovery should support demand and drive 10% growth in FY24F. However, EV (electric vehicle) adoption can slow down as subsidy has been reduced. MHCV (medium and heavy commercial vehicle) retail demand remains on track, driven by infrastructure spends, and we estimate 10% y-y growth in FY24F," says Nomura.

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