Thursday, 10 Oct, 2024
By: Anshul Vipat
In the last six months, 83 lakh units have been sold which is way higher than the 65 lakh domestic sales registered in the same period last year. Image source: IANS
The record sales are happening at a time when international agencies have cut India's GDP growth, retail and food inflation has hit record high and trade deficit and repo rates are increasing month after month
In many previous stories published in India Tracker analysing the marginal recovery in the Indian economy after the Covid pandemic disaster, one clear paradox has been noticed. For instance, in the financial year 2021-22, the GDP growth rate was 8.7 percent, making India the fastest growing economy in the world. Institutions like the IMF and the World Bank, apart from global ratings agencies like Moody’s and Fitch lauded the post pandemic recovery of the Indian economy.
However, surveys conducted on the ground by reputed and credible institutions like the Reserve Bank of India, the Centre for Monitoring the Indian Economy and C Voter revealed that the ordinary Indian was not at all enthusiastic about her current or even future prospects despite the 8.7% GDP growth. Even in 2022, more than two thirds of respondents to the C Voter daily tracker strongly felt that they found it difficult to manage household budgets because of stagnant or declining incomes and high inflation.
But interestingly, automobile sales are hitting record high in recent months. While passenger vehicle sales in the month of September 2022 have broken all the previous records and reached a new high of 3,07,389 in the previous month, two wheeler has hit record high of 12-months, bringing relief to an industry that was hammered by everything from rural distress, high insurance costs. As per data released by the Society of Indian Automobile Manufacturers (SIAM), more than 17.5 lakh two wheelers were sold in the country, an 11 percent increase over previous month.
In the last six months, 83 lakh units have been sold which is way higher than the 65 lakh domestic sales registered in the same period last year, when India was in the throes of the Delta wave. Sales in the world's fourth-largest car market have rebounded as crippling semiconductor shortages ease. Demand has also been propped by the festive season, which typically starts around the month of October when many Indians make big-ticket purchases.
However, the sales is lower when compared to the corresponding period in the pre-pandemic era. As the accompanying chart shows, two wheeler sales had hit record high of 21.17 million units in 2018-19 and since then have been steadily falling and crashed to 13.46 million units in 2021-22. The most optimistic estimates project sales in 2022-23 at about 18 million units; much lower than the peak achieved in 2018-19.
The record sales are happening at a time when international agencies have cut India's GDP growth, retail and food inflation has hit record high and trade deficit and repo rates are increasing month after month. In a survey conducted by C-Voter in August, 51 percent of the respondents stated that their disposable incomes had decreased. And three in four said they were finding it difficult to manage household expenses. Close to 90% said they may not indulge in discretionary spending in the festive season.
In spite of this trend, there has been an exponential rise in the sale of vehicles in India. Given the ballooning external factors, it will be interesting to see whether sales will be affected in coming months or the festive season will wash away all the pessimism.
