The Indian automobile industry registered a marginal 3.1% year-on-year increase in passenger vehicle sales in July to 3,52,492 lakh units as against 3,41,971 units in the same period last year, according to the industry data. The industry leaders have attributed this growth to the consistent increase in SUV (sports utility vehicle) sales during the month under review.

Notably, the wholesale in the automobile industry stood at 3,52,000 units as against 3,19,500 retail sales in July.

During the April to July period of FY24, the domestic automakers sold 13,48,466 units of passenger vehicles, up 7.7% as against 12,52,407 units in the corresponding period of the previous year.

Maruti Suzuki India Limited, the country's largest automobile manufacturer, recorded a 6.4% jump in passenger vehicle sales to 1,52,126 units during the month under review as against 1,42,850 units in the same period last year. Of this, the auto manufacturer sold 42,360 units in the SUV segment in July. The company cornered a market share of 24.1% in the SUV segment in July, as against 7.2% in the year-ago period.

The company's passenger car sales, however, declined by 26.7% year-on-year to 78,040 units as against 1,06,530 units in the same period last year.

According to Shashank Srivastava, Vice President-Marketing & Sales, Maruti Suzuki, the contribution of hatches or small cars in the domestic automobile market dropped significantly to 31% in the April to July period this year in contrast to 34% in the same period last year. Srivastava anticipates passenger cars to continue honing the market share of 31% for the next few quarters of FY24.

Meanwhile, the automobile manufacturer registered 9.2% increase in exports to 22,199 units as against 20,311 units in July last year.

Mahindra & Mahindra recorded a 29% jump in SUV domestic sales to 36,205 units in July as against 28,053 units in the same period last year. According to the automaker, the cumulative sales of XUV700 touched the one-lakh mark. The company's exports, however, declined by 9% to 2,540 units as against 2,798 units in July last year.

"We will keep a close watch on the availability of semi-conductors and select parts to ensure sustained scaleup," says Veejay Nakra, President, Automotive Division, Mahindra & Mahindra.

Tata Motors, the country's second-largest automobile manufacturer recorded almost flat domestic passenger vehicle sales to 47,628 units in July this year, as against 47,505 units in the same period last year. The company's electric vehicle sales, however, witnessed a jump by 53% year-on-year to 6,329 units as against 4,151 units in the same period last year.

South Korean automaker Hyundai India reported a marginal increase of 0.4% year-on-year in passenger vehicle sales to 50,701 units as against 50,500 units in the same period last year. "This has been bolstered by the addition of Hyundai EXTER to an already strong SUV line-up. With the semiconductor supply issues more or less behind us, we are all geared up for the upcoming festive season in India starting with Onam in Kerala," says Tarun Garg, COO, Hyundai Motor India.

Industry leaders, however, anticipate sluggish sales in the next few months of the current fiscal year. "We will have good volumes, but growth industry-wise would be quite small. In September, the industry would see a lesser percentage in growth because of the base effect that has pulled the overall growth down," says Srivastava.

Rating agency ICRA expects the automotive sector to register moderate growth over the near to medium term. "We expect growth across automotive industry segments to remain at high single-digit levels in FY2024. While the passenger vehicle, commercial vehicle, and tractor segment volumes would continue to trend upwards, aided by favourable demand drivers, the two-wheeler industry is also expected to record moderate growth in volumes aided by a low base," says Shamsher Dewan, Senior Vice President & Group Head-Corporate Ratings, ICRA.

ICRA forecasts a CAGR (compound aggregate growth rate) of ~6-9% across automotive segments over the medium to long term.

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