The Indian automotive industry is seeing one of its best growth years this fiscal. With the worst of challenges behind, the expectation from industry stakeholders continues to be buoyant.
In fact, according to a BNP Paribas report, the automotive sales during the ten days of the festive period, which included Dhanteras and Diwali, contributed almost one-third of the overall festive demand. The growth in the final phase of the festivals (November 5-15 Nov) was stronger for most of the sub-segments of the industry compared with that in the same period of last year’s festive season (17-25 Oct 2022).
The growth remained strongest for the two- and three-wheelers, while passenger vehicle and moped registrations were steady. The tractor segment decline continued into the last phase of the festival season, ending the season with flattish growth compared with the same period last year.
On the other hand, despite strong growth during the festival period, the financial year-to-date registration growth for two-wheelers was still at low single-digits (2% YoY) and trailed wholesale growth (6.6% YoY). This suggests inventory levels post the festival period may still be high and the industry’s overall growth remains weak. PV registration and wholesale FYTD growth were similar (9% YoY), showing resilient demand.
In the commercial vehicle segment, the M&HCV industry grew by 10 percent in the first half, with the demand for buses seeing consistent improvement. Softening of raw material prices especially steel has augured well for the industry. Focus on electrification in buses and LCV segment is also expected to drive growth.
The passenger vehicle segment and two-wheeler segment is expected to further see demand for premium products, along with softening of raw material prices benefiting OEMs.
