Car makers to generate Rs 1.1 lakh crore in biz this festive season, retail over a million units

The Indian passenger vehicle market is set to post a record of about Rs 1.1 lakh crore in turnover in the 87-day festive period of 2023, with volumes that are estimated to cross 1 million units for the first time.  

The festive season, which opened with Onam in Kerala in August till the end of Dussehra on October 24, has witnessed about 700,000 units in retail, which is 20 percent higher than last year. It is estimated that in the next 15-20 days, dealers are likely to deliver another additional 300,000 units, which will help the market breach the million-units mark once the peak Diwali period is over.

Interestingly, it will be the 10th consecutive month of record dispatches for the Indian PV industry, which is on course to cross the 4-million units mark and end CY2023 with a record 4.1 million units, an 8 percent increase over the 37,92,356 PVs sold in CY2022.

Record dispatches of around 380,000 units expected in October

Autocar Professional learns that the car makers are set to dispatch around 380,000  units in October 2023, scaling yet another monthly wholesales peak and bettering, the 363,000 units in September 2023.

Shashank Srivastava, Senior Executive Officer, Sales and Marketing, at Maruti Suzuki told Autocar Professional, "It has been a year of new peaks. The demand momentum has held firm and the inventory in the market too has remained fairly in control. The increased stock due to the availability of semiconductors and continued demand for personal mobility has helped the market see new highs. Going by the momentum, the industry may surpass 1 million unit sales this festive season, which is a healthy double-digit growth."

Not only have the volumes sustained record highs, but even value has grown significantly, thanks to the average price moving up due to new regulations and more feature-laden vehicles. The average price of the vehicle industry currently stands at about Rs 11 lakh versus Rs 9.5 lakh last year.

Maruti Suzuki on its part is sitting on bookings of over 265,000 units, Hyundai Motor India is over 100,000-150,000 lakh units, Mahindra & Mahindra too is over 150,000-200,000 units. This indicates that there is enough traction in the market for new models especially newly launched SUVs like the Maruti Suzuki Grand Vitara, Hyundai Exter and Mahindra XUV700 amongst others.

Commenting on the market momentum, Tarun Garg, COO, Hyundai Motor India said: "During the 10-day Navrati-Dussehra period, HMIL dealers witnessed robust deliveries of over 30,000 units, reflecting 8 percent YoY growth and consistent with year-to-date growth thus far. Our SUVs continue to receive an overwhelming customer response. We see the festive momentum sustaining until Diwali." 

Running up to the key festivities of Diwali, the passenger vehicle market is estimated to have an inventory of about 320,000 units at the end of October. At the same time, cumulative pending bookings are around 500,000-600,000 units across car makers at present, which is likely to come down once the festive season concludes.

Unlike last year, the easing of the semiconductor issue after July2023 has helped carmakers ramp up output and reduce the long waiting periods. The retail momentum post-Diwali will determine the production plan in the forthcoming months.

While the number of days of inventory has been hovering around 30-40 days, the value in stock is at a whopping 4.5 billion dollars or about Rs 36,000 crore,  underlining the critical role the Indian PV industry plays in contributing to GDP as well as the GST collection of the government.