The Indian auto sector made a strong recovery from the COVID-led slump this year despite rising interest rates and cost increases due to new emission and safety norms. The industry is embarking on a journey with the goal of maintaining its growth momentum in 2023, PTI reported.
Despite the lingering effects of semiconductor shortages and supply chain bottlenecks, the passenger vehicles (PV) category is expected to achieve record sales in 2022, while the 2-wheeler space is yet to see sustained sales buoyancy after having suffered for most of the year, the report said.
The three-wheelers and commercial vehicles segments, on the other hand, have also witnessed good growth in 2022 compared to 2021, albeit on a low base of last year, and the manufacturers expect the same momentum to continue in the next year.
According to industry watchers, the adoption of electric vehicles which began to take hold in 2022, will also accelerate in 2023, notably in the two-wheeler market.
For potential passenger vehicle buyers, 2023 may not be the best year yet, as vehicle prices are expected to rise next year as manufacturers prepare to comply with stricter emission standards that go into effect on April 1, 2023.
Many manufacturers, like Maruti Suzuki, Tata Motors, and Hyundai, have already announced plans to increase prices from January next year, according to the report.
Besides, rising interest rates and the not-so-bright global economic situation and its impact on India in the days to come are some of the factors keeping the industry in a cautious mode.
"An increase in price always has a certain negative impact on sales." But we still do not know how much the prices will go up or what will happen to input costs and foreign exchange. These are unavoidable uncertainties," Maruti Suzuki India Chairman R C Bhargava told PTI.
According to the Society of Indian Automobile Manufacturers' (SIAM) Director General Rajesh Menon, the passenger vehicle industry adopted the second phase of fuel efficiency regulations this year, effective April 2022, and is preparing to meet the stringent second phase of BS VI emission norms, effective April 2023.
Mahindra & Mahindra (M&M) Executive Director (Auto and Farm Sectors) Rajesh Jejurikar, remained confident about the industry maintaining the current sales momentum.
Tata Motors' Managing Director for Passenger Vehicles and Electric Vehicles, Shailesh Chandra, pointed out that it would be worthwhile to see the impact of macroeconomic factors like inflationary pressure on the industry.
"I would say that the growth is going to be high this year, but next year on a very high base, with the interplay of so many tailwinds and headwinds, it would be still growing, but to what extent that growth would be on the high base, that will be seen," he noted.
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