Passenger vehicle (PV) sales are likely to rebound in the second half of the current financial year and the industry expects to clock sub-5% growth in the full financial year 2024-2025, said Shailesh Chandra, president of the Society of Indian Automobile Manufacturers (SIAM) on Monday. Chandra is also the managing director of Tata Motors Passenger Vehicles.
In the first half of the financial year, the PV industry faced several headwinds such as general elections, intense heat waves, erratic monsoons and the inauspicious Shradh period. All these factors led to a decline in demand and owing to the high base effect of last year, it became difficult for the industry to clock growth.
“The high base effect will impact the industry in the short term, but over a long-term period, the industry compounded annual growth rate (CAGR) typically hovers around the GDP growth of the nation. Therefore, a modest 3-5% growth is what one could expect from the PV segment by end-FY25,” said Chandra.
Optimistic that the second half would offset the flattish growth of the first half, Chandra is confident that sales would pick up in the festive season on the back of new launches. “In the first 10 days of October, we witnessed a 35% month-on-month growth, and hopefully, the festivities would bring cheer to the PV volumes,” he said.
On the back of a 13.2% growth in utility vehicle sales, PV sales in H1 grew by 0.5% to 2,081,143 units as against 2,070,960 units in the same six months of the last financial year. Commercial vehicle sales fell 4.2% year-on-year in H1 to 445,004 units. The three-wheeler and the two-wheeler segment registered growth in H1 of FY25. While three-wheeler sales grew by almost 10% to 373,799 units, two-wheeler sales grew by an impressive 16.3% to 10,164,980 units.