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Indian Car Sales Analysis for CY2023

We present the Passenger Vehicle Industry Analysis for Calendar Year 2023 in this report.


  • The Indian mass-market passenger vehicle industry crosses the 4 million mark!

  • It registered the highest-ever yearly sales of 41,00,258 vehicles in CY2023.

  • The average monthly volume in 2023 was 3,41,688.

  • 3,91,066 vehicle sales make October 2023 the best sales month in history.

  • Strong demand for SUV and crossover body-style products is the major driving factor.

Indian mass market PV industry

Easing supply chain shortages of 2021 and 2022 have resulted in the highest ever passenger vehicle sales in 2023, despite several industry-specific headwinds like fuel and car price inflation, a hardening interest rate, and adverse foreign exchange movements.

2023 registered sales of 41,00,258 vehicles, an 8.3% growth over 2022, when the industry was reeling under a semiconductor shortage. Growth was further sustained by some exciting new SUV/Crossover launches that happened across 2022 & 2023 and high-level discounts on several products.

Decoding growth path

To better understand growth trends, we at Auto Punditz put together the Indian passenger vehicle CAGR (Compound-Annual-Growth-Rate) in series, with 2004 as a common base year. Growth in 2023, at its best, can be regarded as a steady state when seen in the long term.

The comparison between 2018 (the best year before the pandemic) and 2023 clearly highlights the growth segment in the Indian passenger vehicle market.

The post-pandemic world has had a significant impact on the Indian passenger market when demand for mid- and large-size personal vehicles (taxed above the 43% GST rate) grew at a faster rate, thus reversing the trend of shared mobility, which was earlier on the rise, especially in metro and tier-1 cities. Now, people want to venture out even more in the post-pandemic world, and poor service from shared mobility service providers makes a stronger case for owning personal mobility.

Low-end products are still reeling under stress, thus carrying hefty discounts and reflecting differential purchasing power in the post-pandemic economy because not all income groups were equally and severely affected by the pandemic.

Another factor driving the mid- and large-size segment is the introduction of successful new UV products with high aspirational value from Mahindra, Hyundai-Kia, Maruti, and Toyota. These products also fall in a higher price range, thus helping automakers earn higher revenue (top line) and profit (bottom line).

Automotive industry growth has been asymmetric since 2020

The PV industry did perform exceptionally well in 2023; however, the 2-wheeler (2W) industry is yet to fully recover in the post-pandemic world, though it has shown some major signs of improvement in recent months of 2023. Growth returned to the luxury PV market with a 12% surge over the 2018 best; however, discount season was also back for slow-moving products.

All three graphs put together indicate that growth is propelled largely by pandemic savings in mid-middle, higher-middle, and lower-higher income groups.

Future growth path 

Headwinds for 2024 include a tightened monetary policy with an inflated interest rate on vehicle loan products, which may impact growth. High consumer inflation also has an impact on short-term purchase decisions.

Discounts are back, especially in the entry-level market and for unsuccessful products. The economic performance of India is tightly correlated with PV growth, and future growth will generally follow the GDP growth rate, with occasional leads or lags depending on consumer sentiments.


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