The Indian auto industry continues to witness a strong sentiment across segments in September 2022, seeing an overall YoY growth of 21.2%. Last September, the industry achieved retails of 1,727,008 units, while this time around, it managed 2,093,286 units.
Even on a quarterly comparison, the industry grew by 18.3% YoY by closing Q2FY22 with retails of 6,052,628 units as opposed to 5,115,112 units in the same period last year.
Vinod Aggarwal, President, SIAM, noted that the festive season and the easing of chip shortages have led the industry to grow. However, he added that higher commodity prices, high interest rates, inflation, and high CNG costs remain a challenge.
Interestingly, the SIAM report noted that although the industry is witnessing strong growth, entry-level vehicles in the 4W and the 2W segment continue to suffer from a downhill growth.
Rajesh Menon, Director General, SIAM, said, “September month has been generally good for industry, as passenger vehicle segment has recorded highest ever sales in H1 and commercial vehicle segment has started showing trends of better market demand. Off-take of entry level two-wheelers and entry level passenger vehicles have been of concern especially as the rural demand has not picked up.”
FY23 is shaping up to be the best year for the industry; however, where many segments may see new heights, some may fall behind the pre-pandemic level.
Also notably, the exports across segments in September have taken a blow as many of the nations to which Indian vehicles are exported restricted imports due to fluctuations in foreign exchange, Aggarwal noted.
PVs across segments have seen good growth in the month of September as well as in the second quarter of the fiscal.
September 2022 saw PV retails grow by a whopping 91.8% YoY with retails of 307,389 units, while the Q2 figures suggest growth of 38.4% with retails of 1,026,309 units. Interestingly, Aggarwal noted that the utility vehicle retails have grown significantly, so much so that the share of the sub-segment has grown from one-third to half of the total PV sales.
Meanwhile, the two-wheeler segment too has shown good improvement as it grew by 12.8% from September 2021 to close September 2022 with retails of 1,735,199 units. The segment also grew by 12.9% YoY as it saw retails of 4,673,931 units compared to 4,136,484 units in the same period last year.
The apex body believes that the rural segment is still in distress due to the rising inflation; however, hopefully, good monsoons may turn into a positive picture resulting in the entry-level two-wheeler’s positive growth.
The three-wheeler segment has also grown significantly as it managed retails of 50,626 units in September 2022, resulting in a 73.4% YoY growth. While in Q2FY23 the segment grew by 69.63% YoY to 120,319 units.
In terms of CVs, the sentiments also reflect positivity as the overall segment grew by 39.4% YoY to 231,880 units in Q2FY23. In the quarter, the M&HCV segment grew by 48.9 % YoY, while the LCVs segment managed to grow by 34.9%.
Overall, the apex body believes that FY23 will witness the industry touching new heights; however, recent increases in the prices of CNG fuel, higher Repo Rates and the Russia-Ukraine conflict are of concern and could impact the market in the coming months, the SIAM President stated.
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