As the festive fervor enveloped the nation, India witnessed a historic automotive milestone with over 1.03 million cars and SUVs rolling off the showrooms during the 90-day festive season. From Onam in Kerala to Bhai Dooj across states, the automotive market in India witnessed an unparalleled surge, contributing significantly to the country’s economic landscape and GST collections.
Scaling New Peaks: A Maturing Market
The Indian car market is not only hitting new volume peaks each month but is also experiencing a rise in the average ticket price. Fueled by a growing economy, increased disposable income, and a younger population, the market is maturing swiftly, reflecting in safer and technologically advanced vehicles.
Festive Season Growth: Breaking Previous Records
Between August 17 and the end of Navratri, the automotive industry marked an impressive growth of over 18%, retailing more than 7 lakh units. An additional 3.25 lakh to 3.3 lakh units were estimated to be sold between Dussehra and the season’s conclusion, surpassing a cumulative festive sale of over a million units for the first time. This growth exceeded last year’s festive sales by 20-25%, showcasing the industry’s resilience.
Reducing Wait Times: Adequate Stock Makes the Difference
Shashank Srivastava from Maruti Suzuki credits the longer festive period and the availability of semiconductor chips, coupled with robust production, for breaking records and achieving over 1 million deliveries. Adequate stock at dealerships distinguished this festive season, allowing value seekers and spontaneous buyers to make on-the-spot purchases.
Rural Markets Shine: Rural Sales Outpace Urban Growth
Maruti Suzuki experienced higher growth in rural sales compared to urban areas, with an 11% increase in rural sales versus 9% urban growth. Rural sales now constitute 44% of the total sales for Maruti Suzuki. Overall, small towns and villages contributed to 31% of total sales in 2023, signaling a significant market shift.
Challenges Overcome: Positive Customer Sentiment
Despite challenges, including semiconductor shortages, the automotive industry overcame obstacles and reported positive customer sentiment. Hardeep Singh Brar from Kia India notes the industry’s optimism, with supply chain issues largely resolved. Kia reported its fourth-highest sales performance in October, indicating strong demand and a positive outlook.
Looking Ahead: Projected Growth and Economic Fundamentals
While production has already seen month-on-month corrections, post-season bookings and inquiries will be crucial in predicting the market’s trajectory for the remainder of 2023. The consensus suggests that a robust festive season will drive passenger vehicle market growth by 7-9%, reaching 4.13 million units for the 2023 calendar year.
Conclusion: Navigating a Unique Phase
As the industry navigates a unique phase characterized by high bases and low growth, the fundamentals of strong brands and products remain pivotal. Despite entering a period of low inventory and reduced waiting times, the industry’s strong performance is a testament to India’s resilient economy and the enduring appeal of quality automotive offerings.
