Indian automobile industry reports 12.5% sales growth amidst firm economic climate

The Indian automobile industry has registered a commendable growth, with sales surging by 12.5% during the recently concluded financial year.

Data released by the Society of Indian Automobile Manufacturers (SIAM) on Friday revealed that total domestic sales escalated from 2.12 million units to 2.38 million units during the 2023-24 period. Categorically, passenger vehicle sales witnessed an 8.4% increase, three-wheelers surged by 41.5%, two-wheelers by 13.3%, and commercial vehicles marginally by 0.6%.

The passenger vehicle segment spearheaded the growth trajectory, with overall sales reaching nearly 5 million units, inclusive of 4.2 million domestic sales (an 8.4% growth) and 0.7 million exports.

Despite lingering below the 2018-19 peak, the two-wheeler segment exhibited a notable recovery, boasting a robust growth rate of over 13% in domestic sales, totaling almost 18 million units.

Conversely, the domestic commercial vehicle industry experienced marginal growth, reaching 9.7 million units. Within this segment, a decline was noted in light commercial vehicles and small commercial vehicles attributed to the degrowth in the CNG segment.

SIAM highlighted that the growth in commercial vehicles was influenced by the transition to higher tonnage trucks, enhancing payload capacity, a shift not fully reflected in unit numbers.

The three-wheeler industry approached its previous peak of 0.7 million units recorded in 2018-19, indicating a steady recovery.

Export figures, however, remained under pressure throughout the financial year, witnessing significant declines in commercial vehicles, two-wheelers, and three-wheelers, albeit marginal growth observed in passenger vehicles.

Nevertheless, a promising rebound was observed in the last quarter, particularly in the two-wheeler segment, signaling brighter prospects for the current year.

Furthermore, the industry showcased its commitment to sustainability by initiating the production of vehicles compliant with 20% Ethanol blending. Additionally, there was a remarkable 90% growth in electric passenger vehicles and a 30% increase in electric two-wheelers.

Vinod Aggarwal, President of SIAM, expressed optimism, stating, "The industry remains optimistic as the macroeconomic outlook remains positive. Coupled with a promising monsoon forecast, we anticipate sustained growth for the industry in the upcoming year."