India PV market posts world's second highest volume increase in 2017

Even as the Indian passenger vehicle and overall automobile market strongly strides towards recording robust sales in the ongoing fiscal, 2017 sales data reveals that new passenger vehicle sales soared by 8.8% to a record of 3.61 million units.

Therefore, last year’s results broke the last record achieved in 2016 when 3.32 million vehicles were sold. Good economic conditions along with better deals and more cars to choose boosted sales and allowed India to keep its key position in the global ranking. It was the third year in a row of growth, and at the same time the highest percentage growth since 2012.

India was the world’s fifth largest vehicle market getting very close to Germany, in the fourth position, as the gap between them reduced from 287,000 units in 2016 to only 96,200 vehicles last year.

These encouraging results were possible thanks to a solid volume growth which was the world’s second largest after China. Both passenger cars and light commercial vehicles drove the growth with increases of 7.7% and 19.2% respectively.

“Indian car market is firmly heading to the world’s top 3. This time there is enough evidence to predict strong growth in the coming years as more car makers localise their production and more modern models hit the roads. It is likely to see India ahead of Germany this year,” said Felipe Munoz, JATO’s global automotive analyst.

Small cars continue to dominate following the government’s benefits. City cars and subcompacts counted for almost 2 in 3 cars sold in India in 2017. However, only the subcompacts posted a positive change with volume up by 9.7% to 1.11 million units, or one of the world’s biggest market for this kind  of cars. The city-cars’ volume remained stable at 987,800 units, down by 0.4% compared to 2016 figures.

SUVs were the third largest segment with sales totalling 693,900 units, up by a massive 31.8%. India is one of the latest markets to join the SUV boom just as the USA, Europe and China have done already. These vehicles counted for 21.5% of total passenger car sales, or 3.9 percentage points more than the share seen in 2016. The arrival of small, cheaper and more modern SUVs is boosting this segment as the figures by subsegment show: B-SUVs volume grew by 36.5% to 508,400 units.

Maruti Suzuki India’s strong position was reinforced in 2017 with its market share jumping from 46.6% in 2016 to 49.6% last year. The launch of the new Dzire sedan along with the solid growth recorded by the Vitara Brezza and Baleno, helped to further increase the dominant position of the market leader.  

Honda did very well too thanks to impressive results of the WR-V, its smallest SUV for India. In fact, this model helped Honda to outsell Tata Motors and Renault-Nissan, with the first increasing its sales by 4.2% and the latter posting a 10.9% decline.

Also read: 
Global new car sales: the key trends and what they mean for the future

2018 opens on a strong note for Indian OEMs