Indian passenger vehicle market scales new peak of 3 million, grows fastest in 7 years
MUMBAI/NEW DELHI: India’s passenger vehicle market is estimated to have crossed a key milestone in the just-ended fiscal year. Sales, suggest numbers reported independently by automakers, have topped the 3-million-unit mark for the first time in a 12-month period.
Sales of cars, utility vehicles and vans increased more than 9% in fiscal 2017, show data released by companies. That was the fastest pace of expansion in seven years, and auto makers expect the momentum to gain strength this year with growth possibly crossing over to double digits.
“Consumer sentiment is good; growth in the industry should be in the range of 9-10%," said Sumit Sawhney, managing director at Renault India. Money is back in the system post demonetisation, retail inflation is under control, the government is investing heavily in infrastructure and economic activity is picking up, he said, giving the reasons supporting his prediction.
For the industry, what went by was a turbulent year, with demonetisation putting a pause on a great run and then, towards the close of the year, a Supreme Court order banning sale of vehicles that don’t conform to Bharat Stage IV emission rules leading to some fire sale, though not that much by passenger vehicle makers. Companies such as market leader Maruti Suzuki recorded strong sales month after month, and most shrugged off the impact of demonetisation after a month or two. India, which broke into the group of the top-five passenger vehicle markets in 2015, was the third fastest growing in the world in the 12 months through December 2016.
In a recent interview, Maruti Suzuki chairman RC Bhargava said the company was poised to grow in the double digits in fiscal 2018 after a similar performance in fiscal 2017. "The economy will continue to improve, unless something unexpected happens, there is no reason now to think it will reverse the trend ... and that is always good for the car business," he had said.
If Maruti, which makes one in every two cars sold in the local market, sustains the momentum and others join the race, driven by an improved economy and new model launches, the passenger vehicle market is set for a new high.
Last year, new models were a key driver of sales. In the 15 months starting January of 2016, there were as many as 42 new launches, including facelifts and refreshes, by mainstream automakers and another 30-36 by luxury-car makers in India. The local industry is set to add fresh capacity of 3.5 lakh units in the next 15 months, with Suzuki Motor opening a new facility in Gujarat and Mahindra & Mahindra and Fiat Chrysler Jeep expanding their operations.
They are also readying more launches. M&M managing director Pawan Goenka said his company has a pipeline of about half a dozen products for launch this year. “We go into 17-18 quite confident that it will be a good year for us,” Goenka said. In the year ahead, the market is set to witness introduction of models ranging from entry-level cars to multi-crore products from Lamborghini and Maserati.
Datsun will seek to accelerate its presence with the 1-litre RediGo in the entry car space. After a long time, year 2017 will see a slew of compact sedans in the form of a new-gen Maruti Suzuki Dzire, the Tata Tigor, facelifted Hyundai Xcent and the Chevrolet Beat Essentia.
Tata Motors will enter the compact SUV space with the Nexon and is readying for the launch its most talked about product, sports car TAMO RaceMo.
South Korean carmaker Hyundai will aim to stake a claim in the mid-size sedan space with a new generation Verna to challenge Maruti’s Ciaz and Honda’s City, while Toyota will introduce its Vios to shake up the segment further.
The year will also see the first major offering from Jeep, the Compass, which has a potential to shake up the volume SUV space. Renault will reinforce its strong SUV maker image with the Kaptur, to challenge the Mahindra XUV.
Sales of cars, utility vehicles and vans increased more than 9% in fiscal 2017, show data released by companies. That was the fastest pace of expansion in seven years, and auto makers expect the momentum to gain strength this year with growth possibly crossing over to double digits.
“Consumer sentiment is good; growth in the industry should be in the range of 9-10%," said Sumit Sawhney, managing director at Renault India. Money is back in the system post demonetisation, retail inflation is under control, the government is investing heavily in infrastructure and economic activity is picking up, he said, giving the reasons supporting his prediction.
For the industry, what went by was a turbulent year, with demonetisation putting a pause on a great run and then, towards the close of the year, a Supreme Court order banning sale of vehicles that don’t conform to Bharat Stage IV emission rules leading to some fire sale, though not that much by passenger vehicle makers. Companies such as market leader Maruti Suzuki recorded strong sales month after month, and most shrugged off the impact of demonetisation after a month or two. India, which broke into the group of the top-five passenger vehicle markets in 2015, was the third fastest growing in the world in the 12 months through December 2016.
In a recent interview, Maruti Suzuki chairman RC Bhargava said the company was poised to grow in the double digits in fiscal 2018 after a similar performance in fiscal 2017. "The economy will continue to improve, unless something unexpected happens, there is no reason now to think it will reverse the trend ... and that is always good for the car business," he had said.
If Maruti, which makes one in every two cars sold in the local market, sustains the momentum and others join the race, driven by an improved economy and new model launches, the passenger vehicle market is set for a new high.
Last year, new models were a key driver of sales. In the 15 months starting January of 2016, there were as many as 42 new launches, including facelifts and refreshes, by mainstream automakers and another 30-36 by luxury-car makers in India. The local industry is set to add fresh capacity of 3.5 lakh units in the next 15 months, with Suzuki Motor opening a new facility in Gujarat and Mahindra & Mahindra and Fiat Chrysler Jeep expanding their operations.
They are also readying more launches. M&M managing director Pawan Goenka said his company has a pipeline of about half a dozen products for launch this year. “We go into 17-18 quite confident that it will be a good year for us,” Goenka said. In the year ahead, the market is set to witness introduction of models ranging from entry-level cars to multi-crore products from Lamborghini and Maserati.
Datsun will seek to accelerate its presence with the 1-litre RediGo in the entry car space. After a long time, year 2017 will see a slew of compact sedans in the form of a new-gen Maruti Suzuki Dzire, the Tata Tigor, facelifted Hyundai Xcent and the Chevrolet Beat Essentia.
Tata Motors will enter the compact SUV space with the Nexon and is readying for the launch its most talked about product, sports car TAMO RaceMo.
South Korean carmaker Hyundai will aim to stake a claim in the mid-size sedan space with a new generation Verna to challenge Maruti’s Ciaz and Honda’s City, while Toyota will introduce its Vios to shake up the segment further.
The year will also see the first major offering from Jeep, the Compass, which has a potential to shake up the volume SUV space. Renault will reinforce its strong SUV maker image with the Kaptur, to challenge the Mahindra XUV.
