Following breakneck growth in 2022, PV sales might run into bumps this year

At Auto Expo 2023, the company is showcasing two new SUVs – a crossover utility vehicle based on the Baleno platform and the Jimny – to expand its presence in the segment that accounts for 42% to overall sales of passenger vehicles in the country.

Growth in passenger vehicle sales in India is set to taper off this calendar year after a record 2022 even as the country remains a bright spot among emerging markets despite global uncertainties, senior industry executives said.

In addition to a high base effect, sales are expected to soften due to increase in vehicle prices after implementation of stricter emission norms and higher interest rates on loans are expected to impact car sales growth this year.

Several senior industry executives ET spoke to expect PV sales in the local market to increase 6-8% year on year to 4-4.1 million units in 2023. PV sales in the country zoomed 23% year on year in calendar 2022 to a record 3.79 million units. The previous record was 3.39 million vehicles sold in 2018.

T Suzuki, representative director and president at Suzuki Motor Corporation (SMC) – parent of the country’s largest carmaker Maruti Suzuki – said the global macroeconomic environment remains volatile with countries altering interest rate policies, commodity prices shifting, and the Russia-Ukraine conflict sparking off an energy crisis in Europe. “We are passing through a very difficult phase,” he said.

The Indian market remains “very important” for SMC, accounting for 50-60% of its global volumes annually, Suzuki said. Maruti Suzuki will continue its product offensive to meet customer needs, especially in the fast-growing SUV segment, to shore up volumes and recoup lost market share, he said.

At Auto Expo 2023, the company is showcasing two new SUVs – a crossover utility vehicle based on the Baleno platform and the Jimny – to expand its presence in the segment that accounts for 42% to overall sales of passenger vehicles in the country.

His rivals, too, expect a slowdown in sales growth. “There are many hurdles but India is comparatively a bright spot,” said Tae-jin Park, MD of Kia India. “The war in Ukraine, surge in Covid cases in China, higher interest rates, stricter emission norms are all making it more difficult to maintain the same rate of growth we saw last year.”

Shailesh Chandra, managing director, PV business, Tata Motors, said, “…the industry will now grow more naturally, in line with the growth in the economy.”

Tata Motors, which sold more than half a million vehicles in the domestic market last year, plans to continue its product onslaught in the SUV segment and fortify its portfolio of electric vehicles in the coming year. The company displayed electric versions of SUVs Harrier and Sierra, which it will drive in over the next two years.

Korean auto major Hyundai is more optimistic. Unsoo Kim, MD of Hyundai Motor India, while conceding there are uncertainties globally, said India is growing much faster than other developed and developing economies. “Last year, we saw very big growth in India. We hope this year also (sales) will be high,” Kim said.

MG Motor India said with shortages of components easing, the company should outperform the industry, which will likely grow in single digits.