New Delhi: Boosted by record sales in the second quarter of the current fiscal, passenger vehicle dispatches to domestic dealers crossed the 20-lakh unit mark in the first six months (April-September) of any financial year for the first time, according to Society of Indian Automobile Manufacturers (SIAM) data released Monday.
The demand for passenger vehicles, driven by demand for SUVs, was also reflected in the highest ever retail sales in the first half of the year (H1FY24), Federation of Automobile Dealers Associations (FADA) data last week showed.
While all vehicle categories saw good demand in the first half of the financial year, with three-wheelers and tractors seeing record retail sales, for commercial vehicles, the April-September 2023 period was the second best half year retail sales.
The two-wheeler segment, however, still showed signs of stress even though retail sales saw year-on-year (YoY) growth.
SIAM president Vinod Aggarwal added that the highest ever passenger vehicle (PV) sales – both for the first half of the year as well as second quarter (July-Sept) – was driven by demand for SUVs. As per SIAM data, PV sales stood at 19.37 lakh units in H1FY23, 13.33 lakh units in H1FY20 and 17.44 lakh units in H1FY19.
For passenger vehicles, H1 FY24 retail sales stood at over 18.08 lakh units, up 6.19 percent from over 17.02 lakh units in H1 FY 23. In H1FY22, passenger vehicles sales stood at 13.35 lakh units and in H1 FY 21 at about 7.83 lakh units.
Aggarwal told reporters that so far the ongoing Israel-Gaza conflict has had no impact on the Indian auto industry. “Our dependence on Israel for trade is not that high, so we have seen negligible impact up to this point,” he said.
“It’s a wait-and-watch situation. If the conflict escalates, then there might be cause for concern, but as of now, there is none,” he said to a query on potential logistics issues arising from the conflict.
Last week, FADA president Manish Raj Singhania said that the PV segment showed “steady resurgence and growth” and witnessed record retails. “This continued growth trajectory of the PV segment for two consecutive fiscal years is a testament to the resilient demand and the market’s positive response to the diverse and dynamic offerings in the segment,” he said.
“However, the 2W segment is under stress, still far from its H1 FY19 peak of 97,27,200 units, reflecting the diverse challenges and successes within India’s auto retail sector,” he had said.
Two-wheeler sales a worry
The two-wheeler sales stood at 78.28 lakh units in H1 FY24. While the sales were up 7 percent from 73.13 lakh units in the year-ago period, they were 19.5 percent lower than the record sale of 97.27 lakh units in H1 FY19.
“With the festive season on the horizon, bringing with it a promise of renewed consumer interest and potential demand surge, we anticipate a season of growth and prosperity for the auto retail sector, moving from cautious optimism to a hopeful and positive outlook for the market,” Singhania said last week.
Though sluggish two-wheeler sales are a concern, Aggarwal said, that “as we get into the festival season, all segments of the Industry are optimistic and look towards posting good numbers in Q3 as well”.
The SIAM president further said entry-level PVs and two-wheelers did not experience growth in the first half of FY24, attributing this to a shift in consumer preference towards higher-level vehicles and stagnating incomes in rural areas.
As three-wheelers emerged as a star performer in automobile sales, Aggarwal said this was driven by “positive sentiments in the economy as well as pent up demand”. During the first half of this year, wholesales of three-wheelers grew 72 percent to over 3.39 lakh units, from about 1.97 lakh units in the previous period. Retail sales grew 65.66percent to over 5.33 lakh units from more than 3.21 lakh units in H1 FY23.
“The 3W (wheeler) segment was the undisputed star, with a remarkable 66 percent YoY growth, consistently registering unparalleled sales figures month after month. Notably, the first half of FY 24 saw the 3W segment retailing a record-breaking 5,33,353 units, significantly outperforming H1 FY 19 figures of 3,58,187 units. This extraordinary performance underscores the sector’s vigorous recovery and adaptability in navigating through the complex market challenges presented by the pandemic,” Singhania said.
Tractors sales stood at about 4.44 lakh units in H1 FY24, up from over 3.89 lakh units in the same period a year-ago. The figures were about 3.73 lakh units and over 3.34 lakh units in H1 FY22 and H1 FY21.
Commercial vehicle sales stood at 4.65 lakh units, up 3.25 percent from 4.50 lakh units in H1 FY23.
Singhania said that the sales in the first half of this fiscal year is second highest after record sales of 4.72 lakh units in H1 FY19. As per the data released by FADA, the sales of CVs stood at just 2.83 lakh units in H1 FY22 and 1.25 lakh units in H1 FY21.
(Edited by Tony Rai)