New milestone in 2023: What drove India to record over 41 lakh car sales
- India witnessed sales of 41 lakh passenger vehicles in 2023, up from 39 lakh units sold in 2022.
The just concluded year 2023 was a cheerful one for the Indian auto industry, as the car manufacturers in the country breached the four million mark for the first time. Sales of new passenger vehicles in India recorded 41 lakh units milestone, marking around 8.2 per cent growth over 39 lakh units registered in 2022.
The Indian passenger vehicle market, valued at ₹4.5 lakh crore has been showing astounding recovery since the pandemic shock in 2020. Despite the pandemic shock and other related challenges like semiconductor shortage, supply chain disruption, etc., the Indian automobile industry has been showing great resilience. Registering 41 lakh cars in a calendar year in 2023 was a sign of that.
What's behind the spike in passenger sales in India
Several factors played their respective crucial roles in the spike in sales of new passenger vehicles. While the country witnessed a massive influx of new models, significantly improved economic conditions driven positive consumer sentiment too was one of the major roleplayers behind this growth. Apart from that, improving road infrastructure across the country was another significant reason behind this growth of new passenger vehicle sales.
Improved supply chain helped in more car production
While the pandemic-struck 2020 and immediate subsequent years were marred by the massive supply chain disruption, majorly driven by semiconductor shortage across the world, India was relatively at a safer spot. Microchips are considered a major component in modern cars as a lot of functions are driven by these tiny chips. Due to the pandemic, there was a massive scarcity of semiconductors. When the pandemic started waning, there was a huge demand for microchips, which created a demand and supply mismatch. This created quite a ruckus in the global auto industry. However, India was in a relatively safer spot considering the fact that the cars in the country have fewer chips. This helped the carmakers in India to produce cars faster than their global peers. The situation in the supply chain has drastically improved since then and the heightened sales of passenger vehicles in 2023 is a testimony to that.
Massive influx of passenger vehicles
The year 2023 witnessed one of the highest numbers of passenger vehicle launches in India when all the carmakers in the country launched a wide range of new and facelifted models in both mass-market and luxury car segments. There were several special edition models too that were launched in India in 2023, boosting overall car sales. The demand for SUVs and MPVs has been rising rapidly across India, keeping in sync with the global trend. This propelled the automakers in India to launch a host of new models, as well as facelifted iterations of existing SUVs in the country in 2023. Some of the major SUVs launched in India in 2023 were Maruti Suzuki Jimny, Maruti Suzuki Fronx, Tata Nexon facelift, Hyundai Exter, and Honda Elevate in the mass-market segment. These SUVs cumulatively propelled the growth of passenger vehicle sales across the country in 2023.
Electric cars and CNG variants fuelled growth
Not only internal combustion engine-powered cars but electric vehicles, hybrid and CNG-powered models too witnessed massive growth in 2023. Last year, several mass-market and luxury car manufacturers launched their respective electric cars in the country, which included both new models as well as updated facelifted iterations of the existing ones. Some prominent electric cars launched last year in India included the MG Comet, tata Nexon EV facelift, BMW iX1, BMW i7, Citroen eC3, Volvo C40 recharge, Hyundai Ioniq 5, Audi Q8 e-tron, Audi Q8 e-tron Sportback etc. Besides these pure electric cars, several hybrid cars and CNG models were launched in India, which propelled the growth of the market, keeping focus on the growing demand for environment-friendly cars.
Improved consumer sentiment
After a pandemic-marred end of the last decade, since 2021, the economic condition across the country has improved gradually, fuelling growth in various industrial sectors, and improving employment conditions. Paired with the rising demand for personal mobility, which received a booster dose of encouragement during the pandemic, the improving economic activities and resultant positive consumer sentiment played a highly important role in the growth of passenger vehicle sales across India. The 41 lakh units of passenger vehicles sold in the country in 2023 came as a testimony to that.
Improving supportive infrastructure
For the growth of vehicular activities and automobile sales, the development of a supportive infrastructure ecosystem plays a crucial role. In the case of the automobile industry, a supportive infrastructure means better roads, more CNG fuelling stations, more electric vehicle charging stations etc. In 2023, the road infrastructure development was significantly impressive across the country. Several highway projects across the country under the Indian government's ambitious Bharatmala Pariyojana have received shots in the arm. The EV charging infrastructure too witnessed rapid growth thanks to the participation of the major OEMs as well as other stakeholders of the ecosystem. CNG refuelling stations have witnessed growth as well, which prompted the carmakers to launch CNG variants of their vehicles to cater for the rising demand of consumers, eventually encouraging buyers to buy CNG models.