NEW DELHI: Led by strong demand for sports utility vehicles (SUVs), annual passenger vehicle (PV) sales crossed the 40 lakh or 4 million units mark for the first time in 2023. As per industry estimates, domestic PV sales in 2023 stood at 41.08 lakh units as against 37.29 lakh units sold in 2022, an annual growth of 8.3%.
Growth rate in 2023 is the slowest in 3 years as PV sales recorded an annual growth of 27% in 2021 and 23% in 2022. Much of the industry’s volume this year was led by SUVs as this segment’s share in total sales rose from 42% in 2022 to 49% in 2023. SUV sales in 2023 clocked a growth of 26% and it played a major role in pushing the average price of vehicles to Rs 11.5 lakh in 2023 as against Rs 10.58 lakh in 2022. The share of hatchbacks and Sedans in total PV sales registered a major dip in 2023 as multiple price hikes, fewer launches and a general shift towards SUVs dented demand in these two segments.
Maruti Suzuki (MSIL) sold 17.08 lakh PVs (domestic) in 2023, up 8.5% YoY, while Hyundai’s annual domestic sales crossed 6 lakh mark, up 9% for the first time in 2023. Tata Motors, Mahindra & Mahindra and Toyota also reported their best-ever annual sales in 2023. Going into 2024, the industry believes it will be difficult to maintain a high growth rate.
“Growth in 2024 will be muted to low single digit as it would come on a high base. The pent-up demand, which we saw earlier this year will not be there in 2024…Also, the transfer of RBI’s 250bps surge in repo rate to auto loan is a negative for the industry. So far 130bps has crept into auto loans and another 120bps is expected to get transferred in the coming months,” said MSIL senior executive officer (marketing & sales) Shashank Srivastava.
Tarun Garg, COO of Hyundai Motor India (HMIL), said the positives for 2024 are GDP estimates going up and the stock market trading at an all-time high. Tata Motors said 2023 was the third consecutive year of record sales.
