The automobile sector’s growth is on a positive track for a second consecutive year with more than 1.9 crore new vehicles registered in the country by October.
A record 2.5 million new vehicles were registered in the country in October this year, marking an impressive start to the festive season. In Karnataka alone, 14.51 lakh new vehicles were registered by the first week of November.
The auto sector witnessed a 14.13 percent year-on-year (YOY) growth in 2022 and is expected to maintain the momentum in the current fiscal. Uttar Pradesh topped the list while Karnataka emerged as the top fourth state in terms of new registered vehicles this year, according to data by the Parivahan department.
According to data by the transport department, Bangalore registered the most number new vehicles in the state with Bangalore South RTO registering the highest at 18.8 lakh new vehicles in the year followed by Bangalore East.
Experts in the automobile industry say that the time from Navratri, Dussera to the new year, sees the most sales in terms of private vehicles, especially cars and motorbikes.
Indian automobile industry
The automobile sector accounts for 7.1 percent of India’s GDP and 49 percent of manufacturing GDP with a share of 4.7 percent in Indian exports and is considered to be a big player in the economy.
It is the third largest automobile industry in the world in terms of manufacturing and fourth largest in terms of sales and is considered a big player in the economy.
Dr. Amit Sahoo, a senior economics professor said, “The growth of automobile sector is going to have an impact on other sectors too via forward and backward linkages. The steel industry, spare parts, tyres –all of them will benefit from the rising demand of automobiles.”
Federation of Automobile Dealers Association (FADA) is optimistic about the sector’s growth. FADA president, Mr. Manish Raj Singhania said, “As Fiscal Year 2024 unfolded, the auto retail sector in India embarked on a journey of cautious optimism and resilience amidst a mix of obstacles and victories across various vehicle categories.”
The narrative of H1 (first half) FY’24(July 1, 2023-June 30, 2024) is one of resilience and recovery, with the total auto retail registering a 9percent growth YoY. All categories also showed YoY growth with 2W (two-wheeler), 3W(three-wheeler), CV(commercial vehicles), PV(private vehicles) and Tractor growing by 7, 66, 3, 6 and 14 percentage respectively.”
Festive season to bring in new records
“With the festive season on the horizon, bringing with it a promise of renewed consumer interest and potential demand surge, the Federation of Automobile Dealers Associations (FADA) anticipates a season of growth and prosperity for the auto retail sector, moving from cautious optimism to a hopeful and positive outlook for the market” said FADA president.
Jyoti, who recently bought a car in Bangalore said, “We have been planning to buy a car for months but the festive season sales made us wait. We booked our car earlier this month expecting to get the delivery before Diwali but because of long waiting period, we now we have to wait at least till December end to get the delivery.”
Dr. Amit Sahoo, said, “The increase in demand of cars and other vehicles shows that consumer’s confidence in the economy is getting stronger. The purchasing power of consumers is increasing with the aggregate demand.”
SUVs in demand
Starting from mid-2020s’, Sports Utility Vehicle-SUVs have been the most sold car class worldwide. The growth of this market is expected to continue in the future, due to the popularity of crossover vehicles.
According to Autocar India, the sports utility vehicle segment has become the largest-selling car body type in the Indian market in 2022. This is the first time in a calendar year that the SUV has overtaken the humble hatchback, which was the primary choice for millions of Indians over the years.
Auto Punditz, an automobile sector analyzing platform, said that the SUV/ crossover body styled products now command a 46 percent share of the Indian passenger vehicle market.
According to experts, the rise in demand of SUVs is attributed to features like higher height and ground clearance to get a better view of the road and more leg space.
Currently, in the SUV category, Mahindra Thar, Mahindra Scorpio, Maruti Suzuki Grand Vitara, Tata Harrier and Hyundai Creta are the most popular in the market among others as per carwale.com.
