Indians bought record 3.6 million cars in FY'23. 5 big factors powering demand
- The Indian car market - now the third largest in the world, saw 10,000 cars sold each day in FY'23.
The Indian passenger vehicle (PV) industry may have never had it this good. In FY'23, the market saw 3.6 million cars being sold, a new record which surpasses the previous best of 3.2 million registered in the pre-pandemic FY'19. Bouncing back from the challenges during the Covid-19 period, the Indian car market is expected to continue its charge forward with most manufacturers reporting a relatively high wait period for most of their models.
According to latest data released by Federation of Automobile Dealers Associations (FADA) on Tuesday, the PV segment grew by 22 per cent year-on-year in FY'23. This is a special cause for celebration because the pandemic period with numerous lockdown phases saw sales falling to record lows. Even the period post the worst phase of the pandemic saw different challenges like shortage of semiconductor parts and climbing component costs.
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Despite some of the prevailing challenges, here are five big factors that are ensuring high car sales in the Indian car market:
New car launches
The pandemic period forced several car manufacturers to defer launches in 2020 and 2021. This meant that the backlog of the new models increased and once pandemic-related tensions eased, the delayed-launches took off across segments. Completely new models as well as updated cars have created a big buzz in the Indian market, leading to a positive sentiment among buyers.
Easing of semiconductor shortage
FADA notes that availability of car units to dealers and customers have increased in recent times due to increased manufacturing capabilities, powered by the easing of semiconductor shortage issue.
SUV mania prevails
The continuing - and rising - popularity of SUVs among Indian car buyers is a big positive and this is recognised by most manufacturers. Mahindra & Mahindra, for instance, sold over 36,000 SUVs in March alone. Maruti Suzuki has underlined its firm focus on the body type and will launch Fronx and Jimny shortly. Honda too is giving final touches to its mid-size SUV.
Positive customer sentiments
Many industry watchers especially point to a positive customer sentiment towards cars in India. The pandemic times resulted in increased savings which are now being channelled towards new purchases across the market and especially in the PV segment. This is also one key reason why luxury car makers are registering strong sales.
Festival periods see re-surging sales
FY'23 was the first full year without any impact of Covid, noted FADA. As such, sales during festive periods provided a notable boost to overall sales performance.