India's auto sector cruises in top gear as higher demand drives up sales

New Delhi, July 2 (IANS) India’s auto sector is cruising in top gear in the current financial year with leading players notching up higher sales of cars, two-wheelers and commercial vehicles driven by higher demand in a growing economy.

The launch of new models, especially in the SUV segment has driven up the sales of passenger vehicles, while two-wheeler sales have surged on the back of higher rural incomes, according to auto sector executives.

The demand for commercial vehicles has also increased, reflecting the higher level of economic activity that is taking place in the economy. This raises the demand for commercial vehicles to transport goods both in the farm and industrial sectors.

Domestic & international sales for commercial vehicles of leading manufacturer Tata Motors in June 2024, were 15,224 units vs 14,770 units in June 2023; while in Q1 FY25 it stood at 41,974 units, vs 36,577 units in Q1 FY24.

Girish Wagh, Executive Director, Tata Motors Ltd, said, “Tata Motors Commercial Vehicles domestic sales at 87,615 units in Q1 FY25 were 7 per cent higher than Q1 FY24 sales. Additionally, sales in June 2024 were 3 per cent higher compared to May 2024.”

Leading car maker Maruti Suzuki reported a 3 per cent YoY increase in domestic passenger vehicle sales at 137,160 units in June 2024, up from 133,027 units in June 2023. The market leader’s sales for the April-to-June quarter rose 1.2 per cent to 419,114 units.

Maruti Suzuki’s arch-rival Hyundai has also seen an increase in sales driven by the SUV segment. “We closed H1 of calendar year 2024 with overall sales growth of 5.68 per cent YoY. SUVs have contributed strongly, accounting for 66 per cent of our domestic sales. The new Hyundai CRETA has been a key driver for domestic H1 sales with 91,348 units sold -- growth of 11 per cent over the same period last year,” said Tarun Garg, chief operating officer, Hyundai Motor India Ltd.

Similarly, Mahindra & Mahindra sold 40,022 vehicles in the domestic market in the SUV segment, a growth of 23 per cent and overall, 40,644 vehicles, including exports. The domestic sales for Commercial Vehicles stood at 20,594.

According to Veejay Nakra, President, Automotive Division, M&M Ltd, “We sold a total of 40,022 SUVs in June, a growth of 23 per cent and 69,397 total vehicles, an 11 per cent growth over last year. June has been a momentous month, as we rolled out the 200,000th XUV700 from our facility. We also celebrated 25 years of Bolero Pik-Ups, a category creator and a market leader in the LCV segment.”

With demand reviving in the rural areas, two-wheeler sales have gone up. Motorcycle major Bajaj Auto posted a 7 per cent increase in domestic two-wheeler sales in June at 177,207 units, against 166,292 units a year ago. For the April-to-June period, it also posted a 7 per cent increase in domestic sales at 582,497 units, against 542,931 units in the first quarter of FY24.

Honda Motorcycle & Scooter India's sales stood at 518,799 units, clocking a 60 per cent YoY growth. This includes domestic sales of 482,597 units and exports of 36,202 units.

TVS Motor Company recorded monthly sales at 333,646 units in June 2024, up 5 per cent YoY. Its two-wheeler sales registered growth of 6 per cent from 304,401 units in June 2023 to 322,168 units in June 2024.