Indian Auto Industry Continues to Maintain its Position: Strong Sales and Exports

Published On: 12 March 2024
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The automobile sector of the country is divided into four segments: two-wheelers, passenger vehicles, commercial vehicles, and three-wheelers.

India holds a significant position in the global automotive market as it is the biggest tractor producer, the third-largest heavy truck maker, and the second-biggest bus manufacturer in the world. The automobile sector of the country is divided into four segments: two-wheelers, passenger vehicles, commercial vehicles, and three-wheelers, each having strong market leaders. Interestingly, the two-wheelers and passenger vehicles segment dominate domestic demand.

Recently, the Society of Indian Automobile Manufacturers (SIAM) issued a report stating that the Indian automotive industry has witnessed significant growth with the help of both domestic sales and exports. In February 2024, the domestic automotive sector recorded sales of 18,94,900 units across their respective segments, thus marking growth of 28.7 percent year-on-year (YoY). In terms of exports, the industry witnessed a significant YoY growth of 36.17 percent, with 4,08,422 units shipped.

The passenger vehicle (PV) market saw a sales growth of 9.16 percent with sales of 3,19,519 units. The exports of passenger vehicles also surged by 20.4 percent to reach 54,043 units. In the beginning of March, FADA reported that the PVs segment bagged a new sales milestone for the month of February, with 330,107 units being sold. The PV segment last month registered a rise of 12.3 percent.

The Director General of SIAM, Rajesh Menon, commented on the growth of the Indian automotive sector and stated that, “Passenger Vehicles again reported its highest ever sales of February posting sales of 3.7 Lakh units with a growth of 10.8% (including Tata Motors), compared to February 2023."

The two-wheeler segment also saw substantial growth. This segment witnessed a YoY growth of 34.6 percent with 15,20,761 units, whereas Indian manufacturers exported a total of 3,28,082 units, marking a significant milestone with the growth of 39.5 percent.

The Indian auto sector has significantly recovered after the COVID-19 pandemic, and it is expanding every month. Although the industry witnessed significant growth, divergent opinions exist within the sector about the future.

The President at SIAM, Vinod Aggarwal, has expressed optimism, highlighting the positive impact of events like the Bharat Mobility Global Expo 2024. While the President of FADA, Manish Raj Singhania, has shared his concerns about the surged inventory levels in the passenger vehicle segment, stressing the need for original equipment manufacturers to adjust production to balance the financial burden on dealers in India.

However, there is high hope for the two-wheeler market, as robust indications from the rural sector and rising demand for entry-level and premium models are predicted to propel the industry.