The Covid-19 pandemic has changed not only the dynamics of our daily lives, but also the way people think and move. It is not surprising that the various automotive segments are experiencing mixed demand.
For the Indian automotive industry, for the first quarter of the financial year 2023, the overall automotive retail sales stood at 48,32,955 units across two, three, four wheel, tractor and utility vehicles. This translated to growth of 64% and 206% over the same period for fiscal years 2022 and 2021 respectively. But compared to the first quarter of fiscal 2020, a pre-covid period, sales were down 8%.
The passenger vehicle segment is expected to see record sales this fiscal year, but what’s interesting is that while entry-level vehicle sales slow and OEMs reduce their product offerings in the segment, sales of premium vehicles and compact SUVs were able to drive growth.
But for the two-wheeler segment, this has been a problem, as sales of premium products have not been able to compensate for the slowdown in sales of scooters and entry-level motorcycles (up to 125 cc).
Vinkesh Gulati, President of FADA, says, “The pandemic has seen customer expectations improve and OEMs have also introduced higher quality products. Previously, the entry-level segment accounted for around 50% of passenger vehicle sales, but has now fallen to 40%. On the other hand, what we have observed is that there is an increasing demand for compact SUVs, which ranges between Rs 8 lakh to Rs 15 lakh. This segment now contributes up to 50 percent of new passenger vehicle sales. We are seeing a major leap there.
He further points out that over the past three years, the segment has seen an influx of many new models and features, which were once limited to the premium segment.