The July automobile sales, released by the Society of Indian Automobile Manufacturers (SIAM), have shown a mixed trend. While the three-wheeler segment has turned out impressive numbers, the two-wheeler numbers have de-grown. The passenger vehicle sales number is up, albeit not in a significant way.
The mixed automobile sales numbers come on a day when the Reserve Bank of India kept the policy rate unchanged at 6.5%, signalling its resolve to bring inflation down.
Passenger vehicle sales in the domestic market were 3,50,149 units in July 2023, up from 3,41,370 units in July 2022. But the July 2023 numbers released by SIAM do not contain the sales figures of BMW, Mercedes, JLR and Volvo Auto. Three-wheeler sales were 56,034 units in July 2023, up from 31,324 in July 2022. Two-wheeler sales stood at 12,82,054 units in July 2023, down from 13,81,303 units in July 2022.
Vinod Aggarwal, President, SIAM, expected the positive economic environment, good monsoons and the upcoming festive season to support continued growth in the auto industry.
According to Rajesh Menon, Director-General, SIAM, passenger vehicle sales have been the highest ever in July. There has been a marginal sales growth of 2.6% compared to July 2022.
The segment-wise July 2023 domestic sales numbers are: passenger cars 1,09,859 (1,43,522), utility vehicles 1,80,629 (1,37,104) and vans 12,037 (13,239). A segment-wise reading of the SIAM number indicates that utility vehicle sales are doing well. Sales of passenger cars and vans have dropped in July this year vis-a-vis the same month last year. Significantly enough, all three segments have improved in July 2023 export numbers compared to July 2022.
Though domestic three-wheeler sales improved considerably in July 2023 compared to the same month last year, the export numbers have dropped to 26,772 units in July 2023 from 38,081 units in July 2022. The biggest disappointment was the two-wheeler segment which has reported a significant decline in domestic sales. Export of two-wheelers, too, has dropped in July 2023.
Looking at the cumulative numbers for April-July 2023, all the segments of the automobile industry have reported improved sales figures compared to the same April-July (2023-24) numbers. On the export front, however, all three segments – passenger vehicles, three-wheelers and two-wheelers – have shown a drop in cumulative numbers for April-July (2023-24) vis-a-vis the previous year.
Cumulatively, the production numbers of all these three segments have shown improvement in April-July (2023-24). A month-wise comparison, nevertheless, shows a decline in two-wheeler production in July 2023 compared to July 2022.
Going forward, the auto industry has to navigate tough roads ahead. The two-wheeler sales especially give a clue or two to the rural demand. With the Reserve Bank of India concerned about inflation, the auto industry has a lot to ponder over.
“The RBI reiterated its resolve to bring inflation back to 4% on a sustainable basis and highlighted risks beyond the transitory vegetable price pressures. We expect inflation to average at 5.6% in FY24 with inflation expected to print above 6% till September,” said Abheek Barua, Chief Economist, HDFC Bank.
It remains to be seen how the RBI's action on the rate front will impact automobile sales in the coming months.
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