Sales of utility vehicles rise in December, demand for entry-level cars muted

India's top automakers in December reported a double-digit rise in the sale of the more expensive utility vehicles, while entry-level cars saw muted demand despite discounts. Auto sales numbers are keenly watched as they are among the key indicators for assessing private consumption, which has more than 50% weightage in calculating the country's economic growth.

By: Reuters
| Updated on: 02 Jan 2023, 18:15 PM
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Maruti Brezza sub-compact SUV
Maruti Brezza sub-compact SUV
Maruti Brezza sub-compact SUV
Maruti Brezza sub-compact SUV

Utility vehicles (UV), among the fastest-growing segments, saw a 22.3% rise in sales at Maruti Suzuki India and 62.2% at Mahindra and Mahindra.

Utility vehicles have grown more popular among buyers this year, nearly matching production volumes of entry-level cars and sedans, according to the Society of Indian Automobile Manufacturers.

Also Read : Sales of electric two-wheelers may miss FY23 target of 10 lakh units: SMEV

"Discounts have been higher in the entry-level because their demand has been relatively weaker. There is also high inventory," said Jay Kale, senior vice president, Elara Securities.

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While India's retail inflation eased below the central bank's upper tolerance level for the first time this year in November, latest unemployment data showed joblessness rose to a 16-month high.

"The price hikes that auto companies have done is a huge jump for buyers in lower-to-middle income brackets," said Mansi Lall, research analyst at Prabhudas Lilladher.

Hero MotoCorp, the world's largest bikemaker, reported a marginal fall in sales, while Bajaj Auto's two-wheeler sales dropped 22%. Sales of TVS Motor Co's two-wheelers also fell 3.3%. Tractors sales, which indicate demand in rural economy and the state of farm incomes, were up by 27.2% at Mahindra and 18.7% at Escorts Kubota. The commercial vehicles (CV) segment reported a double-digit growth for December, with sales at industry leaders Eicher Motors and Ashok Leyland rising 17.3% and 44.9%, respectively.

First Published Date: 02 Jan 2023, 18:14 PM IST
TAGS: SUV car sales
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