The newly-elected president of SIAM believes that after a flat industry performance in H1, the burden lies on H2 to pull the country's passenger car sales to register a 3-5% year-on-year growth by end-FY25.
14 Oct 2024 | 3563 Views | By Mayank Dhingra
The Managing Director of Tata Motors Passenger Vehicles, Shailesh Chandra, who is also the newly-elected president of the Society of Indian Automobile Manufacturers (SIAM), is hopeful that the festive season will spur demand for passenger vehicles (PVs), which reported a flat performance in the first six months of the financial ...
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The Managing Director of Tata Motors Passenger Vehicles, Shailesh Chandra, who is also the newly-elected president of the Society of Indian Automobile Manufacturers (SIAM), is hopeful that the festive season will spur demand for passenger vehicles (PVs), which reported a flat performance in the first six months of the financial year.
As per SIAM, PV sales in the April-September 2024 period or H1 FY25 were pegged at 2,081,143 units (H1 FY24: 2,070,960), registering a flattish 0.5% year-on-year (YoY) growth. In the July-September quarter or Q2 FY25, the PV segment reported a 1.8% YoY decline, clocking cumulative sales of 1,055,137 units (Q2 FY24: 1,074,395).
While the high base effect with robust year-ago volumes is being cited as the most prominent reason for this degrowth, according to Chandra, “FY25 is a consolidation year for the auto industry and we should see the growth stabilising around 6-8% next year. This is primarily because the H1 has been largely flat,” Chandra said, while explaining that from being pegged at around 2.2 million units in FY20, the PV industry grew significantly to surpass the 4-million mark in FY24.
“After a steady performance in FY24, the industry is performing reasonably well this year as well. However, the high base effect will impact the industry in the short term, but over a long-term period, the industry CAGR typically hovers around the GDP growth of the nation. Therefore, a modest 3-5% growth is what one could expect from the PV segment by end-FY25,” Chandra highlighted.
This outlook is in contrast to the original 5-8% industry anticipated growth for the PV segment by end-FY25. According to Chandra, “The initial triangulated view was 5-8% growth. But, in H1, the months of May and June came as slight surprises which affected the industry badly. The growth in the month of September was also offset by the inauspicious Shradh period falling in the same month.”
“Now H2 certainly has a big burden to prep up for the entire year,” he pointed out.
The PV sector reported cumulative sales of 356,752 units in September 2024, registering a 1.3% decline compared to previous year’s sales of 361,717 units. Moreover, the passenger vehicle industry which saw its Q2 volumes consistently surpass the 1-million mark for three consecutive years, with Q2 FY25 volumes being pegged at 1,055,137 units, the numbers were still around 2% lower than the previous year.
According to Chandra, Q3, which is also the period of the festivities, augurs well for the sector. “Q3 is typically a high retail quarter and usually the retail inventory gets built up in Q2. Therefore, we should start seeing good growth from both PV and two-wheeler segments the next quarter onwards,” he said.
“If we see the first 10 days of October, we are already witnessing a 35% month-on-month growth, and hopefully, the festivities would bring cheer to the PV volumes,” Chandra added with optimism.
Also read: PV wholesales flat at 2.08 million units in H1 FY25