Domestic passenger vehicles sales expected to stay strong this fiscal

Cavelossim (Goa): Domestic passenger vehicles sales, specially those of SUVs, are expected to remain strong this fiscal despite the pent-up demand and low inventory which drove up sales in the past are no longer there, according to Tata Motors Passenger Vehicles Ltd. and Tata Passenger Electric Mobility Ltd. Managing Director Shailesh Chandra.

The company, which sold around 50,000 units of electric passenger vehicles last year, is targeting to reach 1 lakh units this fiscal while it also targets deeper penetration of CNG with the launch of its Altroz iCNG premium hatchback. "So far the indicators are good in terms of demand sustaining at high levels, although the additional moves that we were getting from pent-up demand and low channel inventory that have subdued," Chandra said here.

He was responding to a query on the outlook of passenger vehicles sales in India in 2023-24. In the last five to six months, Chandra said two factors -- pent-up demand and low channel inventory, were really driving the demand for the industry. "(Now) these two factors have gone but the key factor, which is the monthly demand that we generate, the flow of customers has sustained at a very healthy level, which is good enough to sustain a retail ability of about 3,10,000 a month (industry wise)," he added.

Chandra further said, "Especially in the SUV segment, we are seeing a growth, which is significantly higher, as compared to where the industry growth will be. On the entry side, there has been a slight pressure that is what we see." The growth in the SUV segment has been driven at "a very high pace" by both upgraders and first time buyers opting for such vehicles, he added. In terms of volumes, he said, "Just two years back, we were talking about 2.7 million to 3 million (units for the) industry. It has gone up to 3.9 million (last year).

Even if it sustains at a 4.1 million level (this year) it's very healthy, it should help the industry a lot." Chandra, however, added that the "unprecedented" growth of about 27 per cent that industry witnessed last year "will moderate a bit". For Tata Motors, he said the idea would be to sustain the segments where it is present -- hatchback and sedans, "and new nameplate additions should come in the SUVs. That will be the focus".

The company's share of SUVs to its total passenger vehicle sales is at around 66 per cent as compared to 43 per cent of the industry, he said, adding, it would grow even further with the launch of Curvv and Sierra, which would be launched in the market in 2024 and 2025, respectively. On electric vehicles, Chandra said Tata Motors has witnessed exponential growth in the last five years to 50,000 units last fiscal from around 500 units in FY19 "The growth journey has been exponential. Now we are on a higher base...the multiples might moderate from three-four times to lower levels, but of course the aspiration would be to be as close to 100,000 (units)," he noted.