Are Indians buying more cars now than ever before? The key figures from FY23
The Indian car market's march continues its climb with sales of passenger vehicles in the fiscal year 2022-23 growing by 26.7 per cent. According to the latest figures released by Society of Indian Automobile Manufacturers (SIAM), wholesale passenger vehicle volumes for the year increased to 3.9 million units, up from 3.1 million from a year ago.
SIAM notes that several factors have contributed to a big boost in demand for cars in the Indian automobile market. The trend of rebounding demand was already at play but FY23 saw even more fertile conditions being created to further bolster prospects for manufacturers.
Introduction of new models
Covid years of 2020 and 2021 saw manufactures pushing back their product launch plans. As lockdown-related restrictions eased, brands began firing these planned products and the slew of launches continued for most parts of 2022 as well. A positive sentiment towards new and updated models created a sense of excitement and played a role in accelerating demand.
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Preference for SUVs
SIAM especially makes note of increasing demand for SUVs or Sports Utility Vehicles as a crucial factor bolstering demand in the car market. Pent-up demand for many models also came as a shot in the arm for manufactures having a wide array of options with an SUV body style. So while companies like Tata Motors, Hyundai, Mahindra - among others - are strengthening their respective SUV lineup, Maruti Suzuki too has been busy with a clearly stated ambition of leading the SUV segment.
Semiconductor shortage issue
The challenge from semiconductor shortage the world over has been easing in recent months which has meant production has accelerated when compared to previous years. This has helped - in many cases - to bring down wait times and ensure that there is a healthy bookings-to-delivery ratio. While still not ideal in many instances, most manufacturers report that wait times are on the decline.
Festive season and new fuel emission norms
SIAM also points to strong demand for cars during the festive season as well as a demand to purchase vehicles before the new fuel emission norms kicked in from April 1 of this year.
It is still not a clear drive towards an unhindered peak as there are challenges that continue to persist. Most manufacturers continue to repeatedly increase prices, pointing to escalating input costs. Market watchers and experts warn that this could eventually lead to dampening of sentiments among buyers. While two wheeler sales rose by 16.9 per cent in FY23, it is not at its ideal level yet. Two-wheeler sales are often a crucial indicator of the financial health of India's lower- to middle-income households.
(With inputs from PTI)