The Society of Indian Automobile Manufacturers (SIAM) has released the domestic sales figures for May 2024, revealing significant growth across various segments compared to May 2023.
Vinod Aggarwal, President, SIAM said, “All the segments viz. Passenger Vehicles, Commercial Vehicles, Two-Wheelers and Three-Wheelers have posted growth in May 2024, compared to May 2023. Passenger Vehicles have only witnessed a moderate growth, primarily owing to a high base effect of the previous year. However, Two Wheelers and Three Wheelers posted growth in double digits. With expectations of above normal monsoon and continued emphasis on economic development by the new Government, as it pursues its goal of Viksit Bharat by 2047, the Auto Industry is optimistic of steady growth in 2024-25 as well”.
Passenger vehicles: steady growth
The total passenger vehicle sales saw a modest increase of 3.9%, rising from 3,34,537 units in May 2023 to 3,47,492 units in May 2024. This can be attributed to several factors, including consumer sentiment, disposable income, and a high base effect of the previous year..
Three Wheelers: robust recovery
The three-wheeler segment demonstrated a robust recovery with a 14.7% increase in total sales, from 48,610 units in May 2023 to 55,763 units in May 2024. This segment’s growth was driven primarily by the passenger carrier sub-segment, which saw an 18.2% increase. Goods carriers also posted a 17.5% rise, indicating a rebound in last-mile connectivity and logistics demand.
Passenger carriers benefitted from the post-pandemic urban mobility needs, while goods carriers capitalised on the booming e-commerce sector.
E-rickshaws and e-carts: mixed performance
E-rickshaw sales, however, saw a steep decline of 48%, dropping from 2,314 units in May 2023 to 1,203 units in May 2024. This decline could be attributed to regulatory challenges, rising competition, and limited battery infrastructure in many cities.
Conversely, E-cart sales decreased by 15.2%, from 297 units to 252 units. Despite the decline, e-carts continue to play a vital role in urban and semi-urban goods transportation, but the segment faces challenges such as higher costs and limited government incentives.
Two wheelers: significant surge
The two-wheeler segment recorded a significant surge of 10.1%, with sales increasing from 14,71,550 units in May 2023 to 16,20,084 units in May 2024. This segment’s growth was driven by scooters, which saw a remarkable 21.1% increase, indicating a preference for convenient urban mobility solutions.
Motorcycle sales also grew by 5%, reflecting robust demand in rural and semi-urban areas. Mopeds posted a 12.7% increase, showing their continued relevance in certain market niches.
The two-wheeler market’s growth is a testament to the increasing demand for affordable and efficient personal mobility solutions.
Quadricycles: slight decline
The quadricycle segment experienced a slight decline of 8.6%, with sales decreasing from 35 units in May 2023 to 32 units in May 2024. This segment remains niche, catering to specific urban mobility needs but faces competition from other small vehicles and regulatory hurdles.
Factors driving growth
Several factors contributed to the overall growth in domestic sales across various segments:
Economic Recovery: The Indian economy has shown signs of recovery post-pandemic, leading to increased consumer spending and confidence.
Government Policies: Policies such as the Production Linked Incentive (PLI) scheme for the automobile sector have encouraged domestic manufacturing and sales.
New Model Launches: Manufacturers have introduced new models with advanced features, catering to the evolving preferences of Indian consumers.
Urbanisation and Mobility Needs: Rapid urbanisation and the need for efficient mobility solutions have driven the demand for passenger vehicles, scooters, and three-wheelers.
E-commerce Boom: The growth of e-commerce has spurred demand for goods carriers and last-mile connectivity solutions.
Challenges and the road ahead
Despite the positive trends, the Indian automotive industry faces several challenges:
Infrastructure Development: The growth of electric vehicles (EVs) is hindered by the lack of charging infrastructure and limited battery technology.
Regulatory Environment: Stringent emission norms and safety regulations require manufacturers to invest in new technologies, potentially increasing costs.
Global Economic Uncertainties: Global economic factors, such as raw material prices and geopolitical tensions, can impact the automotive supply chain.
Looking ahead, the industry is poised for further growth, driven by technological advancements, government initiatives, and evolving consumer preferences. The focus will likely be on sustainability, with increased investments in EVs and green technologies.
The SIAM report for May 2024 highlights the resilience and dynamism of the Indian automotive industry. With significant growth in passenger vehicles, three-wheelers, and two-wheelers, the sector is on a positive trajectory. However, addressing infrastructure and regulatory challenges will be crucial for sustained growth and development.
As India continues to urbanise and modernise, the demand for diverse and efficient mobility solutions will only increase, making it an exciting time for the automotive sector.