They rule the roads; now they are ruling the sales charts too. Utility vehicles are the sole category of cars to show momentum in sales, so much so that overall passenger vehicle sales are positive only if UV sales are factored in. Sales of cars, including entry-level to premium hatchbacks and sedans, dropped 7.9%, from 1,020,946 units to 940,267 units during the April-October period compared to the same period a year back. However, sales of UVs (sports utility vehicles plus multipurpose vehicles) grew 23.3% — from 1,123,708 units to 1,385,309 units — during this period, which pushed the overall passenger vehicle growth to 8.3% from 2,227,917 units to 2,412,337 units.
April-October 2023 is the first such instance after April-October 2019 when passenger car sales dropped even as UV sales grew. Over the past three years, sales of all body types have been growing at varying rates. For instance, in April-October 2022, passenger car sales grew 30% (from 784,959 units to 1,020,880 units), UVs grew 46.5% (from 765,803 units to 1,123,710 units), and overall PVs grew 38% (from 1,614,067 units to 2,227,853 units).
Similarly, in April-October 2021, passenger car sales grew 13.9% (from 689,059 units to 784,959 units), UVs grew 69.3% (from 452,221 units to 765,803 units), and overall PVs grew 35.6% (from 1,190,660 units to 1,614,067 units).
While analysts said they foresaw the slowing down of passenger cars vis-à-vis UVs, they didn’t expect the former to shrink. “Even though in the face of SUVs, premium hatchbacks and sub-4 metre sedans are holding their own — their sales dropped just 1.9% from 793,232 units to 778,043 units — the massive 41.2% drop in sales of entry-level hatchbacks dragged all passenger cars down,” an analyst said.
“Equally disappointing was the performance of midsize sedans, whose sales grew just 2.6% – from 52,222 units to 53,600 units – despite the launch of new models.” In midsize sedans, Honda had launched the facelift of the City and Hyundai had launched the all-new Verna, both in March 2023. While the Verna has been able to double its sales – from 11,409 units in April-October 2022 to 22,046 units in April-October 2023 – sales of the City have halved (from 22,527 units to just 11,054 units). This has negatively impacted sales of overall midsize sedans.
Analysts, however, added that all is not lost with passenger cars, especially looking at the sales performance of premium hatchbacks like Maruti Suzuki Wagon R and Swift.
“The Wagon R has been India’s largest selling car for many quarters, and is expected to remain on top because of its versatility and the price-value equation,” an analyst said. “Similarly, the Swift – despite being such an old nameplate – is selling in good numbers. The all-new Swift, expected to be launched in early 2024, will pull in a substantial number of buyers. But entry-level hatchbacks are expected to fall further, with an increasing number of first-time car buyers preferring second-hand small SUVs or new premium hatchbacks, which are marginally more expensive than new entry-level hatchbacks.”
