Auto industry looks to sustain growth momentum in 2023

New Delhi: The Indian automobile industry is setting out on a journey with hopes for a sustained growth momentum in 2023 and further embracing clean technology amid the lurking speed breakers of rising interest rates and cost increases due to new emission and safety norms, having witnessed a strong comeback from the Covid-led downturn this year.

While the passenger vehicles (PV) segment is set for record sales in 2022 despite the lingering effects of supply chain constraints and semiconductor shortages, the two-wheeler space is yet to see sustained sales buoyancy after having suffered for most of the year. According to industry estimates, PV sales can reach around 38 lakh units this year. The three-wheelers and commercial vehicles segments have also witnessed good growth in 2022 compared to 2021, albeit on a low base of last year, which was affected by the second wave of Covid-19 and manufacturers will be keen to carry forward the momentum to the new year.

As per industry observers, 2023 will also see acceleration in adoption of electric vehicles, which has already started taking root in 2022, especially in the two-wheelers segment. For potential passenger vehicle buyers, 2023 may not ring in the best news as vehicle prices are set to increase next year as companies prepare to conform to stricter emission norms which kick in from April 1, 2023. Many manufacturers like Maruti Suzuki, Tata Motors and Hyundai have already announced plans to increase prices from January next year. Besides, rising interest rates and not so bright global economic situation and its impact on India in the days to come are some of the factors which are keeping the industry in a cautious mode.

"Increase in price always has a certain negative impact on sales. But we still do not know how much the prices will go up and what will happen to input cost and foreign exchange. These are uncertainties which will always be there," Maruti Suzuki India Chairman R C Bhargava said. He, however, stated that the domestic car industry has revived in the last few months and the semiconductor shortages are also going to abate in 2023.