PV industry to close 2024 with record December dispatches

The trajectory of passenger vehicle sales in India has experienced a somewhat fluctuating pattern throughout 2024, yet it is concluding on an optimistic note. This revival can largely be attributed to attractive year-end discounts designed to entice customers, coupled with lucrative incentive schemes rolled out for dealers. Indian carmakers are expected to dispatch approximately 310,000 to 315,000 vehicles in December 2024, according to industry sources. This represents growth of up to 10% year-on-year, culminating in an annual sales volume of 4.25 million units—the highest ever recorded in the industry’s history.

Notably, the December 2024 sales figures are set to become the highest ever for the final month of any calendar year, surpassing the previous record of 286,291 units by nearly 20,000 vehicles.

Impressively, every single month in 2024 has witnessed sales volumes exceeding the three-lakh mark, resulting in a monthly average of 354,982 units—a significant improvement over the 340,985 monthly average recorded in 2023.

December marks the third consecutive month of growth for passenger vehicle manufacturers. The preceding months of October and November recorded year-on-year growth rates of 1% and 4%, respectively. Except for one of the top five automakers, all major manufacturers are anticipated to report dispatch growth ranging from 2% to 17% for December. This positive trend reflects a resurgence in demand following a challenging period earlier in the year. Between July and September, the sector grappled with three successive months of declining volumes. However, since October, the industry has witnessed a steady recovery.

Domestic brokerages – Sharekhan and Emkay Global – have also projected a double-digit growth in December volumes. Domestic PVs are likely to register 10.1% growth (YoY) in volumes in December on the back of higher discounts and forward buying expected due to the price hikes from major OEMs coming into effect in January, Sharekhan said.

“Within PVs, M&M is likely to post better YoY growth, as benefit of newer launches (XUV 3XO and Thar Roxx) is yet to reflect in the base with a relatively fresher product portfolio, though volumes would moderate sequentially,” Emkay Global said.

Over the course of 2024, Indian passenger vehicle manufacturers achieved year-on-year volume growth in nine out of the twelve months, driving the overall annual growth rate to 4%. While this figure marks a deceleration compared to the robust 8% growth recorded in 2023, it is indicative of the industry’s resilience amidst evolving market dynamics. More significantly, the five-year growth trajectory reveals a transformative shift. In 2024, Indian automakers collectively sold 8.10 cars per minute—a substantial leap from the 5.64 cars sold per minute in 2019.

In a recent interaction with Autocar Professional, Society of Indian Automobile Manufacturers (SIAM) President Shailesh Chandra said that growth moderation was expected in this financial year as the industry witnessed significant growth over the past few years. “Despite that, the market has sustained at very healthy levels, and we expect the year to close with sales of around 4.3 million units. To put this into perspective, annual sales stood at 2.7 million units four to five years ago, meaning the industry has grown by around 50% since then,” he said.

“To maintain momentum, OEMs have had to focus heavily on new product launches, market activation efforts, and dealer initiatives. This has made it a challenging yet resilient year for the industry.”

Despite the encouraging trends in wholesale dispatches, the picture on the retail side appears less rosy. Data from the Vahan portal, as of the week ending December 29, 2024, indicates a 5.7% year- on-year decline in car registrations. This discrepancy between wholesale figures and retail registrations suggests that inventory build-up at dealerships may have played a role in bolstering December's dispatch numbers. It also underscores the importance of monitoring consumer sentiment and end-user demand in the coming months.

Key Highlights of 2024 Passenger Vehicle Sales:

1. Domestic Wholesale Performance: Indian automakers are projected to ship 315,000 units in December, marking a 10% year-on- year increase. This figure represents the highest-ever wholesale volume for the month of December.

2. Record-Breaking Full-Year Sales: The total passenger vehicle sales volume for 2024 is expected to reach an unprecedented 4.26 million units, reflecting a 4% growth compared to 2023.

3. Steady Monthly Growth: The industry achieved an average monthly sales volume of 354,982 units in 2024—the highest on record—surpassing the previous year’s average of 340,985 units.

4. Remarkable Long-Term Growth: Over a five-year horizon, Indian carmakers have demonstrated significant progress, with the number of cars sold per minute rising from 5.64 in 2019 to 8.10 in 2024.

5. Three Consecutive Months of Recovery: December marks the third consecutive month of year-on-year growth in monthly wholesale volumes, signaling a recovery following the contraction witnessed during the third quarter.

While these figures paint a largely positive picture of the Indian automotive sector, the divergence between wholesale dispatches and retail registrations warrants attention. A decline in vehicle registrations could be indicative of subdued consumer demand, delayed purchases, or lingering economic challenges affecting certain segments of the population.

Looking ahead, sustaining this momentum will require automakers to strike a balance between production planning and inventory management. The introduction of new models, coupled with strategic pricing and financing options, could further stimulate demand and enhance market penetration.

In conclusion, 2024 has been a landmark year for the Indian passenger vehicle industry, characterised by resilience, adaptability, and innovation. Despite the hurdles encountered during the mid-year period, the sector has emerged stronger, setting new benchmarks in terms of annual sales and average monthly volumes.

As automakers gear up for 2025, the lessons learned from this year will undoubtedly shape their strategies, enabling them to navigate the ever-changing landscape of tthe automotive market with greater confidence and agility.