Auto sales in the domestic market have improved significantly over the last six months and it continues to grow during the festival season. According to the Society of Automobile Manufacturers’ (SIAM) latest data, total passenger vehicle (PV) sales have grown by almost 40 per cent year-on-year (YoY) to 19,36,740 units between April and September this year as compared with 13,87,714 units in the same period last year. All categories together rose by 32 per cent YoY to 1,09,88,305 units during this period as against 83,05,314 units in April-September 2021 and also in the previous quarter, the total PV sales have grown to more than 10-lakh (10,26,309) units for the first time in history. In an interview with BusinessLine, the newly appointed SIAM President, Vinod Aggarwal, shares more. Edited excerpts: –
Do you think this trend will continue in the current quarter or the next?
This (Indian) economy is doing better; when the economy is doing better, the sentiments become positive. So since the sentiment is positive, it leads to people buying new vehicles….hopefully it should continue and lead to continuous growth of the industry. In the last two years, people were not buying vehicles, so there is a carry-forward demand also in the market.
But, the cost of ownership has also grown now – higher insurance premiums, maintenance costs, etc. Don’t you think that is also impacting somewhere?
Yes, that impacts some of the entry-level vehicles – whether two-wheelers or cars – we see the impact there. There is more stress on entry-level two-wheelers…the effects of inflation, and the requirement to buy insurance for five years at one go at the time of purchase. With all these, the cost of models has gone up significantly, which has affected the segment. Hopefully, with a good monsoon, it should witness some improvement.
What about other challenges?
Interest rates are going up, CNG rates are rising, the inflation rate is high, and there are geopolitical challenges. So there are uncertainties which continue to be there. But, the government is focusing on the economy’s overall growth; therefore, the auto industry should continue to grow in the years to come.
Do you think commercial vehicle (CV) sales will continue like this?
It is growing very well. We expect we will have good CV sales this year because the industry has been slow for the last three years…it is cyclical, actually, and the market for CVs was down even before the Covid hit. The industry had dropped by 40 per cent in 2019-20. But, now it has come out of that and growing…it is in the positive cycle now, and since being positive, we should see a good pattern of the demand equation.
Regarding three-wheeler, some of the established companies are now concerned because most of the sales are happening in the electric category. Your thoughts.
Three-wheeler sales right now are far away from their earlier peak, so it is a little bit of a concern for the industry. But, we are sure that it will come back, and of course, the E-rickshaws are selling more, not the electric three-wheelers.
Even in small cars, the six airbags mandate has been postponed by a year. But, some manufacturers still think it should not be mandatory then also…
That is still in the draft stage, and the government is working on it. Until then, we will discuss amongst the auto industry and see what conclusion comes from it.
Do you think the PV industry will make record sales this financial year? Would SIAM increase its estimation because of that for the whole industry?
I don’t know whether it will make a record, but the first six months have been really good. The six months data has been very encouraging…prospects are good. But, at this time, we cannot make any estimation for the whole industry.
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