Can car sales break the record of 3.38 million achieved in 2018-19?

By: Yash Gupte

According to Nomura Financial Advisory and Securities (India), passenger vehicle sales is likely to cross 3.50 lakh units as they expect strong sales helped by channel pre-festive filling. What also helps is easing supply chain issues.

A few day ago, India Tracker did a story on the record breaking production of four wheeler passenger vehicles in the country. India stands third in the global car selling market in the world. According to the most recent figures from the Organization Internationale des Constructeurs d'Automobiles (OICA), the international trade organization comprising of 39 national automobile industry trade associations, India sold 36,31,095 passenger cars in 2021, compared to 30,96,165 in Germany. The Indian market has a vast opportunity for the increase in vehicle sales as the number of vehicles per 1000 people is just 33 in India which is one of the lowest among the developing nations.

This was the result of the increased production and sales of the four wheeler passenger vehicles in India. The data released by the  Society of Indian Automobile Manufacturers (SIAM) shows that there has been an increase in the vehicles sales in 2022. At the start of the year, 2.54 lakh vehicles were sold which has increased to 2.93 lakhs in July. Although, there was a slight drop in the month of August which saw a total of 2.81 lakh vehicular sales.

However, SIAM data doesn’t include sales of automakers like Mercedes-Benz, BMW, Volvo and Tata Motors.

Source: SIAM

The government owned-VAHAN portal also echoes the sentiments. Vahan is a data repository of all vehicles registered in the country which sources its data from the regional transport offices in the country. According to the portal, a total of 3.85 million four wheelers were registered across the country. As of September 2022, this figure stands at 2.75 million, a marginal increase as compared to previous years. On an average, close to 3 lakh four wheelers are registered in the country every month, as compared to 2.90 lakh vehicle registrations in 2021.

With the festive season round the corner, businesses estimate an increase in sales bringing cheer to the automobile market. According to Nomura Financial Advisory and Securities (India), passenger vehicle sales is likely to cross 3.50 lakh units as they expect strong sales helped by channel pre-festive filling. What also helps is easing supply chain issues.

International credit rating brand Moody’s also estimates car sales to grow by 12.5 percent in 2022, and another 4 percent in 2023. By next year it expects automotive sales in China and India to return to 2018 levels. A relatively stronger macroeconomic environment, the easing of semiconductor shortages as well as restocking by dealers will help India outperform its regional and global peers, Moody's Investor Service said.

Last year, a severe shortage of semi-conductors hit automakers hard, leading to significant downgrading of production. The second wave of the COVID-19 pandemic and the subsequent lockdown also made the matters worse. There was a breakdown of supply chain and consumer demand. However, 2022 has brought a cheer to the automobile sector.