The Indian automobile industry has recently witnessed a phenomenal comeback! Fueled by record sales of passenger vehicles, three-wheelers, and tractors, India has achieved double-digit growth in retail vehicle sales in 2023-24, as reported by the Federation of Automobile Dealers Associations (FADA) on April 8, 2024.
But what’s the story behind this growth and who contributed to it? Let’s try to understand.
What’s Happening?
According to Telegraph India, the Federation of Automobile Dealers Associations (FADA) stated on April 8, 2024, that driven by record sales of passenger vehicles, three-wheelers, and tractors in FY2023-24, there has been a 10% growth in retail sales compared to the previous FY, with a total of 2,45,30,334 units sold, compared to 2,22,41,361 units in 2022-23.
Additionally, focusing solely on passenger vehicles (PV), there was an 8% increase in sales, reaching a total of 39,48,143 units compared to 36,40,399 units sold in 2022-23.
Contribution by Segments
According to ABP Live, the growth in the Indian automobile industry has been driven by the sales of passenger vehicles (PV), three-wheelers, tractors, and EVs:
PV Sales: FADA President Manish Raj Singhania believes that improved availability of vehicles, various models, and new launches have been the primary drivers of this improvement.
Three-Wheelers Sales: The three-wheeler segment witnessed a remarkable 49% growth with sales of 11,65,699 units compared to the previous year. This surge can be attributed to affordable CNG fuel options, market sentiment, and the introduction of new electric models.
Tractor Sales: With sales of 8,92,313 units in the tractor segment, a significant improvement has been recorded compared to the previous fiscal year.
EV Sales: Telegraph India reports a 30.06% YoY growth in the sales of electric two-wheelers, reaching 9,47,087 units in 2024, capturing a market share of 5.4%. The electric three-wheeler segment also witnessed a phenomenal 56.43% growth with sales of 6,32,636 units and capturing a market share of 54.3%.
What Does It Mean for Investors?
The Indian automobile industry has demonstrated excellent performance in the previous FY. Let’s see what it means for investors:
Rising Demand: The consistent growth in sales of passenger vehicles, three-wheelers, EVs, and tractors indicates an increasing demand for vehicles in the Indian market, which is a positive sign for investors.
Popularity of SUVs: The SUV segment is gaining popularity consistently, now capturing half of the market share. This is good news for companies manufacturing SUVs such as Maruti, Tata Motors, Hyundai, Mahindra & Mahindra, Kia, Toyota, etc.
What’s Next?
According to Business Standard, the Indian automobile industry might face some hurdles in the near future. A slowdown in consumer sentiment among urban buyers and the upcoming elections are cited as reasons. However, the market remains ‘cautiously optimistic’ for the long term.
FADA states that the market trend is positive, hoping to boost sales with enticing schemes and better financial options for consumers. However, fierce competition in the PV segment and surpassing last year’s high sales pose a challenge. Overcoming these obstacles requires innovation and strategic market engagement, aiming for balanced growth across all sectors.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The companies mentioned in the article are for information purposes only. This is not investment advice.
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