India's Passenger Vehicle Dispatches in July Estimated at Over 4.66 Lakh Units

India's domestic passenger vehicle dispatches are estimated to have crossed 4.66 lakh units in July, driven by improved affordability and better product availability, while market leader Maruti Suzuki India's domestic passenger vehicle wholesales inched closer to the 2 lakh-unit mark.

According to Partho Banerjee, senior executive officer for sales and marketing at Maruti Suzuki India, the domestic passenger vehicle industry is expected to have recorded sales of 4.65-4.70 lakh units in July, representing growth of around 33% from the 3.5 lakh units sold in the same month last year.

Maruti Suzuki continued its leadership with domestic PV dispatches of 196,203 units in July, while Tata Motors, Mahindra & Mahindra, and Hyundai Motor India reported dispatches of 62,611 units, 60,048 units, and 54,210 units, respectively.

He said the strong demand reflects the benefits of GST 2.0, lower repo rates, income tax relief for entry-level customers, and the right product strategy.

"I always talked about the three tailwinds. One was the GST 2.0. Second, about the repo rate. And third, about the income tax relief to the entry-level customers," he said.

"We are very, very clear that if you can provide the right product at the right price... there is a huge potential for the entry-level cars." Small-car volumes recorded 63% growth, while SUVs rose 48% during the month.

He noted that rising fuel prices remained a headwind, but Maruti Suzuki had sought to reduce the impact by expanding its compressed natural gas (CNG) offerings.

"We have found a way to mitigate that. So, just to share with you that despite the increase in fuel prices, we have been able to come up with a strategy to counter it by offering CNG vehicles," Banerjee said.

While Maruti Suzuki recorded 196,203 domestic passenger vehicle dispatches during the month, it reported total domestic wholesales of 211,365 units, including light commercial vehicles and sales to other OEMs.

Banerjee described Maruti Suzuki's domestic wholesale sales, including light commercial vehicles and supplies to other original equipment manufacturers (OEMs), crossing the 2 lakh-unit mark as a historic milestone for the Indian automobile industry.

"It is a historical milestone that any Indian automobile OEM has touched the 2 lakh mark in a month," he said, adding that only two brands in mainland China currently sell more than 2 lakh vehicles a month, on average, in a single country.

Meanwhile, the management reiterated that the challenge is on the supply side rather than the demand side. The company expects to improve vehicle availability and regain market share with the newly commissioned production lines.

He added that production at the company's new lines would continue to ramp up over the next three to four months to meet customer demand, particularly for SUVs and CNG variants.

Maruti Suzuki also reported its highest-ever monthly CNG sales of nearly 83,000 units and said dealer inventory stood at about 16 days after record July retail sales, indicating healthy demand heading into the festive season.