PVs lead the surge while EVs and CVs show promise
05-Apr-2023 •Hemkesh Khattar
The Indian automobile industry ended FY23 on a positive note, emerging as a success story by bouncing back from the challenges posed by the COVID-19 pandemic, poor demand, and supply chain constraints.
Demonstrating tremendous resilience, innovation, and robust market demand, the industry achieved record sales in the passenger vehicle (PV) segment in FY23. The commercial vehicle (CV) segment also recorded the highest sales since FY19, indicating a positive trend for the industry.
Emerging trends from this turnaround in the Indian automobile industry
Passenger vehicles
The PV segment has recorded its highest sales of over 3.9 million in FY23, with two primary factors driving the growth - strong demand and relaxation of supply chain constraints leading to a rise in production.
Consumer preference and demand in the PV segment are increasingly skewed towards SUVs, which have witnessed a YoY growth of over 30 per cent. However, the sale of compact cars has seen minimal growth, and the sedan segment has performed poorly with negative growth in sales volume.
The EV or electric vehicle segment has shown significant growth potential, with all major companies set to enter the market in FY24, introducing new models in both the passenger and commercial vehicle segments. Tata Motors emerged as the market leader in the four-wheeler segment, selling over 50,000 EVs and achieving overall EV penetration of 12 per cent of its total sales.
Commercial vehicles
The CV segment witnessed a major upturn in sales volume in FY23, driven by robust demand and growth in major economic activities, including infrastructure and construction industries. Most truck and bus segments witnessed healthy growth, except for weak demand in the LCV or light commercial vehicle segment.
Exports
While domestic demand and sales have been high, the same cannot be said for international sales of Indian automobile companies. There was a substantial downward trend, particularly in the CV segment, primarily due to a weak global outlook and economically struggling neighbouring countries of India.
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