In this State of the Economy podcast, Host S Ronendra Singh speaks to Shailesh Chandra, President of the Society of Indian Automobile Manufacturers (SIAM) and Managing Director of Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited on the automobile market.

The sector saw a robust 12% year-on-year growth in overall vehicle sales, with two-wheelers leading the charge. However, passenger vehicle (PV) sales faced a slight setback, raising questions about the factors affecting this key segment.

September saw a 1.4% decline in PV sales, attributed in part to a high base from last year and seasonal factors. Chandra explains: “It’s a high base effect combined with an inauspicious period that dampened sales, but we expect a strong recovery with the ongoing festive season.” He remains optimistic about the upcoming months, anticipating that the festive demand will drive a surge in retail sales.

The Indian automobile market is witnessing a significant shift towards SUVs, a trend that has grown over the past five years. Chandra highlights that this shift is here to stay, driven by consumer preferences and manufacturer strategies: “The SUV segment is a structural shift; it has consistently grown, and the portfolio focus of manufacturers is naturally gravitating toward it.” As buyers increasingly opt for larger, feature-rich vehicles, SUVs are expected to maintain their dominance in the market.

While passenger vehicles faced challenges, two-wheelers surged with a 16% year-on-year growth in September. Chandra attributes this growth to rising rural demand and favorable market conditions: “With the festive season and strong agricultural output, we foresee a continued upswing in two-wheeler sales, especially in rural areas.” He further points out that both urban and rural markets are contributing to this upward trend, which is likely to continue in the months ahead.

Electric vehicles (EVs) are a key focus area, with the government’s policies playing a crucial role in shaping their future in India. Although the demand incentives for electric four-wheelers have been reduced, the government’s efforts to expand charging infrastructure are seen as a game-changer. Chandra remarks: “The government’s focus on expanding EV charging infrastructure is a progressive step that will accelerate electric vehicle adoption.” With a significant budget allocated for building EV charging stations, the industry is set for further growth in this space.

Listen in!

(Host: S Ronendra Singh; Producer: Siddharth Mathew Cherian.)

About the State of the Economy podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders.

Published on October 22, 2024