Car sales experienced significant growth across most firms in January, fueled by enhanced production capabilities, robust order books, and sustained consumer demand, according to data released by carmakers on Wednesday. Despite lingering uncertainties in the supply chain, production levels have shown improvement, albeit staggered. Cumulative dispatches at car companies are estimated to have risen to approximately 17,496 units in January 2023, marking a notable increase from the same period in 2022.
Shashank Srivastava, Senior Executive Officer of Marketing and Sales at Maruti Suzuki India noted that the industry began the month with depleted inventory due to high retail sales in December. This led to a surge in wholesale figures for January as the inventory pipeline was replenished. However, retail sales saw a slight dip, resulting in an increase in network stock to 184,000 units.
Domestic passenger vehicle (PV) sales witnessed robust growth at Maruti and other major manufacturers including Hyundai Motor India, Tata Motors, Mahindra & Mahindra, Kia Motors India, and Toyota compared to January of the previous year.
The Society of Indian Automobile Manufacturers (SIAM) forecasts car sales to reach 3.85 million units by the end of fiscal year 2022-23, with expectations of further growth to 4.05 million units in 2023-24, translating to a 5-6% increase over FY23.
Despite concerns over high inflation and price hikes, hopes for continued strong demand in the automobile sector are bolstered by the Economic Survey's projection of India's economy to grow between 6-6.8%. Executives in the auto industry anticipate that measures such as income tax rebates and increased infrastructure spending announced in the Budget will stimulate consumer spending and drive economic growth.
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Rajesh Jejurikar, Executive Director of Auto and Farm Sectors, praised the Budget for striking the right balance between growth management and fiscal prudence, citing reductions in income and other taxes as measures that will boost consumption and economic expansion. Additionally, the government's focus on infrastructure investments is expected to support long-term sustainable growth.
Despite several passenger vehicle manufacturers implementing price hikes, consumer interest remains steady, with consistent enquiries and bookings. However, semiconductor supply constraints continue to pose challenges to production, leading to losses in wholesale and retail. Maruti, for instance, reports a pending booking of 375,000 units, highlighting the ongoing impact of the semiconductor shortage on the industry's operations.
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