[volkman10]

Key points:

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

- 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, the below shows 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

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.

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.

Source:

[Carma2017]

A very important point mentioned above is that "..growth is propelled largely by pandemic savings in mid-middle, higher-middle, and lower-higher income groups." Enthusiasts mostly belong to the segments that are propelling growth. Hence, forum discussions have been robust and talking more of higher ticket price cars.

I personally don't think the above income segment alone can sustain long term sales. The next wave of buyers will propel the next wave of sales. Already we see industry leaders mentioning lower growth next year. However, truth is a section of people have just not recovered from the economic shock of Covid.

[volkman10]

Passenger Vehicle body style sales analysis - CY2023

- SUV/Crossover body-styled products now command 49% of the Indian passenger vehicle market.

- The hatchback segment is now reduced to 30% due to a lack of demand for entry-level products.

- New age crossovers/coupe makes its presence

- MUVs' share remained flat. Toyota Innova Hycross launched in 2023 has kept the overall MUV market share constant.

- Sedans lost ground further due to a shift in demand towards SUV/Crossover.





Hatchback segment:

- Hatchback segment volume slipped in 2023 due to a rapid drop in sales of entry-level products, despite hefty discounts.

- However, the sub-4m hatchback segment progressed better in 2023.





Sedan segment:

- Sedan segment volume is purely driven by the sub-4m segment, while other sedan segments became insignificant due to crossover obsession.



SUV/Crossover segment:

- Monocoque chassis SUV/crossover volume grew at a rapid rate.

- Ladder chassis SUV demand was largely driven by the Mahindra Scorpio N and Thar. A testament to a changed value proposition can change market size.



High growth segment - Mid-size SUV/Crossover (~4.3m):

- The entry of new products from Maruti-Toyota in 2022, and Honda in 2023 has expanded the segment further in 2023.

- The segment is strongly dominated by Hyundai-Kia (52%)



Emerging segment – ~3.8m Crossover:

- The entry of Tata Punch in 2021 has created a new sub-segment of crossover under the sub-4m category. This is basically a Tiago (hatchback) equivalent in the crossover segment.
- This segment has strong growth potential due to its SUV silhouette, high ground clearance, thus shifting demand from the hatchback segment, and commanding price premiums to generate better profits.

- Maruti is likely to enter this segment with multiple products in 2025/26.



Link:

[volkman10]

Indian passenger vehicle manufacturer analysis.

- Mahindra (+1.8%) and Toyota (+1.2%) gained significant market share by posting 30% and 38% growth respectively.

- Renault (-1.1%), Tata (-0.5%), Kia (-0.5%), and Honda (-0.5%) have lost considerable market share.

- The top four brands control 80% of the Indian passenger vehicle market.

- Hyundai, Tata, Mahindra, Kia, Toyota, and MG posted their best-ever sales in 2023.

Manufacturer wise analysis:



- Among the veteran's, Hyundai, Tata, Mahindra, and Toyota posted their highest sales in 2023.

- Among new entrants, Kia and MG have posted the best sales figures.

Peak (2018) to peak (2023) market share change:



- 2018 was the best year before the pandemic for the PV industry, & many automakers posted their best sales figures.

-However, 2023 has been different. Many old players lost market share due to aggressive new entrants like Kia & MG, followed by resurgent homegrown car makers like Tata & Mahindra.

- Maruti, Hyundai, Honda, & Renault have lost considerable market share since 2018

-Hatchbacks (excluding premium) and sedans (Dzire is an exception) have few takers in the Indian market as of now.

-SUV segment for Maruti, Hyundai and Honda has been very successful


Link:

[niranjanprabhu]

Top Highlights for December 2023 car sales in India!

1. Finally, the first calendar year with sales topping the 4 million mark!!! 4,097,477 to be precise.

2. The first month in 12 months, sales fell below the 300k mark but still the tallest December ever!

3. The share of SUVs/Crossovers was at an all-time high of 54.03% in December and 48.13% for the entire year. This is a good 5% up from a year ago. Hatches have hit an all-time low of 20.01% though overall in 2023 the share was 27.82%. The plummeting charts however are not comforting at all.



4. Top 3 places in sales ranking are Maruti Suzuki India Limited hatches, Swift, Baleno, and WagonR (3Yr CAGRs of 9.2%, 10.7%, and 8% respectively). Despite this, the share of hatches to all cars sold, fell over 3% in the last 12 months.

5. 6 out of the top 10 are UVs, 4 being SUVs and 2 being MUVs. The only sedan is the Maruti DZire. SUVs have a 3-year CAGR of a whopping 35.8%

6. The trailing 12-month sales have been above the 4 million mark since August 2023. This signifies an increase by 8.28% over 2022

7. Some of the top contributors to this growth from a model perspective are the new mid sized SUVs of the Toyota Hyryder and the Maruti Grand Vitara which cumulative shipped out 156,169 numbers, Scorpio-N from Mahindra which grew a fantastic 89% over 2022 to ship 121,420 numbers, the Toyota Innova Hycross which grew sales along with the earlier Innova by over 48% to a whopping 84,071 numbers (Remember that there is a waiting period of over a year for some of these models), the Thar that grew over a third to sell 61,748 numbers and the Tiago that again grew by over a third (thanks to the EV release) to 89,523 numbers. Other notables are the Altroz (68,166 Up 16%), the Punch (150,182 Up 15%), the Swift (203,469 Up 15%), The Bolero (108,319 Up 15%) and the Baleno/Glanza from Maruti/Toyota which sold a whopping 244,526 or almost a quarter a million numbers up almost 12% from last year!


8. The SUV juggernaut continued unabated in 2023 with annual share of the overall market growing from 43.38% to 48.13%. It ended the month of December at a mind boggling 54.03%. The sector grew overall at 20% over the previous year. 3-year CAGR stands at 35.8%

9. The race to the bottom for the hatches too continued unabated with a loss of over 3% over the year and a terrible share of 20% in December. The numbers are actually down 3% in such a fantastic year.

10. Despite a good 3-year CAGR of 10.9% (thanks to a slew of new models released) the sedans are still down over last year by -7.4%

11. MUVs are brilliantly steady both in terms of growth and market share.

12. The Alto is the only micro hatch (ICE) in the country today and has been witnessing a downturn in sales for the last decade! It speaks volumes on not the purchasing power of the India customer but the changing nature of preference. A car that once used to top the charts is today 12th ranked

13. The mid sized sedan that was represented by the Honda City at one time, finds little favor today. The few spurts of growth that we see here are thanks to the continuous efforts of the likes of the VW/Skoda and Hyundai who have invested big in a segment that is showing little signs of fresh interest. BTW the City hit an ALL-TIME LOW sales in 2023 (since 2011)

14. Of all the sub segments of the SUVs the micro segment that was typified by the S-Presso and the Kwid is the only one showing signs of negative growth. ALL other sub segments are simply basking in the sun

15. Of the existing OEMs in the Indian market today, Renault is the ONLY OEM to show 3-year negative CAGR



16. Amongst the larger players the performance of Tata is stupendous and is showing up very generously in its stock prices which are shooting through the roof. The large-scale introduction of EV models is doing magic to its numbers, and it remains to be seen how they will perform this year and if they can take the No 2 crown from Hyundai which they have in December

17. Maruti though the undisputed king of the Indian car industry is under severe pressure due to its over dependence on their hatch business which we have discussed earlier to be in the doldrums. Though the top-ranking models still see a lot of hatches, the long-term consumer interest in them is waning. Maruti is still majorly a hatch producer with almost half of its portfolio comprising of hatches. 67.28% or two thirds of all hatches in the country today are produced by Maruti.


18. Though in the SUV game Maruti is at the top, their overall share is still half of what their overall market share is. With SUVs growing still at a 30+% 3-Yr CAGR, Maruti needs to plug in the gaps in certain of these segments such as the mini-SUV segment typified by the Tata Punch and Hyundai Exter today. The Ignis needs a total redesign and repositioning on an urgent basis

Other Charts of interest

Year on year Growth Rates


3 Year CAGR

[OrangeCar]

Originally Posted by volkman10

Attachment 2556046

Attachment 2556045


Attachment 2556049

No intention of getting into political debates, I feel the first three charts are a fairly good indicator of economic progress.

From 2004 - 2014, we had a coalition government led by one party. And 2014 - 2024, a single party full majority (even though there a coalition partners, who were not needed to form government).

We start 2004 with 10 lakh vehicles sold. End 2014 with approx 25 lakh vehicles sold. That is 2.5X growth in a decade. Plus, 5 of the 10 years are high double digit growth (25%, 19%, 15%, 17%, 32%). CAGR numbers also point towards high growth years in majority of that decade. This period included the dreaded year 2008 recession as well. Not to forget record high fuel prices (tripe digits per barrel), and government paid subsidies on fuel. Basically, government hands tied with less money to spend on many other things.

From 2014-2024, the numbers are disappointing (except for the psychological positivity of crossing 40 lakh end of year 2023). Most years are single digit growth years (3%, 9%, 7%, 9%, 5%, 8.3%). Massive negative growth of 13% in 2019 (pre-covid, obviously!). And 2021, 2022 growth numbers on back of low base and pent up demand (due to Covid lockdowns). Even CAGR wise, it is a period of moderate growth.

Does this mean the previous government did better in terms of automobile growth rate, consequently economic growth? Has high taxation (GST with cess on cars, much higher fuel taxes) from 2014 onwards hurt economic growth, particularly auto sales growth? Is a single party majority even a good thing for Indians, where there exists no opposition, both within the government (read coalition partners) or outside the government in opposition benches?

Will leave this for the economists on this forum to comment.

(Link to GDP growth data from world bank)

[Blakride]

Great Report and Interesting insights!

While the sales are increasing, the revenue would have increased at a greater rate as cars have gone more features laden and expensive.

Drop in sales of entry level cars is surprising but it's not hard to determine why, gone are the days of 3.xx lac Wagon R - now the range goes beyond 7 lac. People would easily spend a couple of lacs more to get a better equipped and safer vehicle like Tata Punch.

[volkman10]

CY2023 wholesales rise 10% at 28.8 million units but still below 2018’s record 26.7 million units.

With all four segments of passenger vehicles, two-and three-wheelers and CVs witnessing good growth in CY2023, India Auto Inc was close to achieving pre-Covid CY2019 levels of 2.30 million units but is a good 3.92 million units away from the record 2.67 million units in CY2018.

Link:

[volkman10]

Top 25 UV utility vehicles in CY2023 - Brezza is the leader in the UV segment.

These best-selling SUVs and MPVs have powered the utility vehicle market’s record sales of over 2.35 million units and 22% YoY growth in CY2023 and Maruti Brezza is the leader.

When it comes to pure numbers from an OEM perspective within the Top 25 models, Maruti Suzuki India leads the table (as under), given that it has a UV market-leading position and a 25% share.

Maruti Suzuki (546,950 units)
Mahindra & Mahindra (423,103 units)
Tata Motors (344,140 units)
Hyundai Motor India (333,602 units)
Kia India (252,667 units)
Toyota Kirloskar Motor (161,918 units)
MG Motor India (31,009 units)
Skoda India (25,931 units)
Nissan India (30,074 units)



- While 11 compact SUVs lead in overall numbers

- 11 midsize SUVs in the Top 25 list which has over 110 UVs and a mind-boggling 800 variants.

-The Top 10 models account for 13,55,656 units or 33% of total UV sales in CY2023, indicating their dominant market positions and popularity.

- 25 best-selling models cumulatively add up to 21,49,844 units or 52% of total UV sales last year

-The Top 10 models have each sold in excess of 100,000 units (and the Top 4 over 150,000 units each)

- Top 10 models account for 13,55,656 units or 33% of total UV sales last year

- the shift in consumer demand for larger UVs is apparent in the Top 25 table – the popular compact SUV segment, which has topped the charts for a number of years, now finds stiff competition from the midsize SUV segment – in CY2023, both segments have 11 models each, along with three MPVs (Maruti Ertiga, Toyota Innova Crysta / Hycross, Kia Carens).

- While the 11 compact SUVs lead in terms of overall numbers (10,98,867 units), the 11 midsize SUVs (768,491 units) reflects their growing demand. The three MPVs accounted for 282,038 units.

- Nexon accounts for 47% of Tata Motors' UV sales, Punch 41%

-Seltos remains Kia's best-seller, Carens MPV sells 68,000 units

-For Toyota Kirloskar Motor- Innova Crysta-Hycross, Hyryder and Fortuner in Top 25

While UV sales have crossed the 2-million-units milestone for the first time in a calendar year, it also means that the UV share of PVs in CY2023 has jumped to 57% of the 4.10 million (41,01,600 units) PVs sold. This is a strong 7 percentage-point increase over the 50% that UVs contributed to PV sales in CY2022.

Maruti and Mahindra battle it out with 5 models each in Top 25

In terms of OEM share of the Top 25, Maruti Suzuki (Brezza, Ertiga, Grand Vitara, Fronx, XL6) and Mahindra & Mahindra (Scorpio, Bolero, XUV700, Thar, XUV 300) have five models each. They are followed by Tata Motor (Nexon, Punch, Harrier), Toyota Kirloskar Motor (Innova/Hycross, Urban Cruiser Hyryder, Fortuner), Hyundai (Creta, Venue, Exter) and Kia (Seltos, Sonet, Carens) with three models each. MG (Hector), Skoda (Kushaq) and Nissan (Magnite) wrap up the Top 25 UV table with one model each.

However, when it comes to pure numbers from an OEM perspective within the Top 25 models, Maruti Suzuki India leads the table (as under), given that it has a UV market-leading position and a 25% share.

A resurgent Maruti Suzuki India, which has benefitted hugely with the launch of new SUVs like the Grand Vitara, Fronx and the Jimny, has expanded its UV market share to over 25% in CY2023. In fact, the company has five models in the Top 25 – the Brezza (170,588 units), Ertiga (129,968 units), Grand Vitara (113,387 units). The Fronx is ranked 11th (94,393 units), while the XL6 (38,614 units) is No. 20 and the Jimny No. 31 (16,206 units). The new Invicto MPV sold 3,389 units in the seven months since launch.


Mahindra & Mahindra matches UV leader Maruti Suzuki when it comes to the models in the Top 25 list: five. The company, which has eight SUVs (Bolero, Bolero Neo, Scorpio, Scorpio N, Scorpio Classic, Thar, XUV300, all-electric XUV400 and XUV700) and a sole sedan (eVerito), is making the most of the surging wave of demand for UVs amidst an ultra-competitive market.

In CY2023, M&M registered total wholesales of 433,172 units, which is 98,084 units more than it sold in CY2022 (335,088 units), to record robust 29% YoY growth. Of this total, UVs are estimated to have sold 433,001 units.

Hyundai Creta retains top midsize SUV title, Venue No. 6 rank, Exter checks in

Hyundai Motor India has all of seven SUVs in the market – three midsizers (Creta, Alcazar, Tucson), two compact SUVs (Venue, Exter) and two EVs (Ioniq 5 and Kona).

The Creta maintains its longstanding title as India’s best-selling midsize SUV with sales of 157,311 units, up 12% YoY (CY2022: 140,895 units). The Creta, which is ranked second in CY2022, is now the No. 3 as a result of the Brezza wresting the No. 1 title from the Nexon.

SUV buyers spoilt for choice in India: over 110 models, 800 variants

At present, 30 vehicle manufacturers offer an estimated 113 models with over 800 variants in India. This includes the luxury vehicle manufacturers.

There are 16 mainstream OEMs in the Indian market (who are SIAM members), and 14 luxury OEMs. Of the mainstream players, Mahindra, Maruti Suzuki and Toyota are the ones with the highest number of models – 8 each. While M&M’s SUV portfolio covers 103 variants, Maruti has 65 and Toyota 51 variants. However, Tata Motors, with six SUVs (including the Nexon EV and Punch EV), has the highest number of variants – 138!

The luxury pack comprises 16 carmakers encompassing 60 models and 150 variants. Luxury market leader Mercedes-Benz India and BMW India have eight models each, followed by Audi India and Land Rover India with seven models each. Given the surge in demand for luxury vehicles, it is not surprising that this German trio of Mercedes-Benz (17,408 units / up 10%), BMW (13,303 units / up 18%) and Audi (7,391 units / up 89%) have each clocked their best-ever calendar-year sales in India in CY2023. Expect SUVs to have contributed a major share of the demand.

Link:

[volkman10]

Made-in-India car and SUV exports rise 3% in April-December, 2Ws, 3Ws and CVs still in the red.




With three months left for FY2024 to close, passenger vehicle OEMs exported 506,217 units are 156,674 units behind FY2023’s 662,891 units, which marked 15% YoY growth. The PV sector’s best-ever fiscal was FY2018 when overseas shipments of cars and SUVs had hit 748,366 units, up 14% YoY.

Maruti Suzuki India maintains its lead as the export market leader in the ongoing fiscal with a big lead. The company has shipped 202,786 units, up 6%, and has a sizeable lead of 73,031 units over Hyundai Motor India (129,755 units). This mean Maruti Suzuki will go on to be the export market leader for FY2024.



Link:

[volkman10]

Best selling cars of 2023.

- Maruti Swift became the best-selling passenger vehicle in India.

- Maruti's Brezza is the best-selling SUV/crossover, followed by the Tata Nexon.

- 4 SUVs/Crossovers occupy the top 10 ranking, followed by 3 hatchbacks, 2 MUVs, and only one sub-4m sedan.

- The top 30 products command 82% of the PV market share.

- 20 of the top 30 products were having some form of discount throughout 2023.

- The top-10 list is still dominated by Maruti’s products, followed by Tata, now with two products, and Hyundai, with only one product.

- SUVs, MUVs, and crossovers are now taking over the top ranks from hatchbacks and sedans.

- All hatchbacks were selling at high levels of discounts.

Maruti Suzuki:

- Alto slipped out of the top-10 ranking, as entry-level products were struggling due to a lack of demand.

- Swift displaced the Wagon-R as the best-selling car in India as customers moved to the premium hatchback sub-segment.

- Maruti Baleno + Toyota Glanza is the best-selling car (2,44,526) from product per se.

- Grand Vitara and Brezza have shown strong growth and amassed higher market share.

Hyundai-Kia:

- Hyundai Creta is the best-performing product here.

- Entry of Exter has cannibalized sales of i10; however, it is the right transition strategy from hatchback.

Tata Motors:

- Nexon and Punch remained firmly footed in top 10 ranking.

- The addition of new drivetrains has helped Altroz (CNG), Punch (CNG), and Tiago (EV) post good growth figures.

Mahindra:

- Scorpio N along with the Classic version has had an exceptionally great year and average sales topping the 10,000 mark.

- The introduction of RWD versions has helped Thar grow further.

- XUV 700 volumes reached its peak.


Toyota:

- Innova, is back on track without any discount and has remained uncontested so far with its diesel (45%) and strong-hybrid (46%) drivetrain offerings.


Prelude: Understanding Product-life-cycle (PLC)

In the automotive industry, each generation of product has two distinct phases in the product-life-cycle (PLC). Phase one starts with a new generation launch based on a completely new platform or modified existing platform or the same platform with a different body shell, followed by successive model year (MY) changes - mostly limited to feature upgrades to keep up with consumer’s expectation and continuously defend territory from competition. Phase two starts with a facelift (FL), again followed by successive MY changes. The extent and depth of FL and feature updates depend on the company’s vision and past performance of the product in the competitive landscape. The Ideal PLC timeline in India is 3+3, i.e. facelift after 3 years of launch and generation change after the next 3 years. Usually, a single platform supports two generations of products and varies widely based on the manufacturer’s platform development strategy. MUVs typically have long PLC due to their utilitarian aspect.

Discount or sales promotion is a tactical approach to meet the value perception of the target customer segment. As products age during the product-life-cycle, it may need higher discount provision in business case to counter competitive challenges which change from time to time. Hence incremental discount with product aging is always provisioned in PLC business case. So, the products selling with the least or no discount deliver better value to the customer and in turn create more value for the manufacturer’s investors. However, if products fall short of customer segment expectation, there will be a call for higher discount to lower transactional price and match customer value expectation and push product out of the showroom, thus eroding profit margin, worsening business case and in extreme case, discontinuation of product from market.

Discount is also used as a tool to support sales in declining product segments or adverse market situations to support volume to cover fixed costs. Extent of discount will again depend on product’s inherent strength and weakness.

Based on these key parameters of PLC, a comprehensive 360⁰ evaluation method is used, which takes into account several key aspects to know the correct health of the product in the competitive landscape.

PLC timeline : Longer PLC usually means higher discounts in later phase, successful products are an exception

- Discounts on offer : Manufacturer/dealer sales push indicator

- Market share growth : Acceptance among customer segment

- Volume growth: This need to be seen in tandem with discount

- Waiting list: Proxy for quality of demand generation

Rating system: best first

Outstanding: Exceptional performer

- Good

- Average

- Below Average




Link:

[volkman10]

Electric & Hybrid Cars Sales Analysis - 2023

Highlights:

- 92,344 BEVs (Battery Electric Vehicle) and 82,606 HEVs (Hybrid Electric Vehicle) were sold in 2023.

- The market share of BEV and HEV was 2.3% and 2% of total PV sales, respectively.

- BEV sales were in continuous decline in H2 2023.

- Tata and Toyota continue to dominate the BEV and strong-hybrid EV markets with 72% and 78%, respectively.

- Tata Tiago EV was the best-selling BEV product, and Toyota Innova Hycross was the best-selling strong-hybrid EV.

- Six brand-new BEV products, as well as a facelift, went on sale in 2023.

-Toyota was the only company to introduce new HEV models in the higher price range. In H2-2023, Maruti also debuted a rebadged Toyota Hycross known as the Invicto.



Market:

- There was a strong surge in Q1 BEV sales due to the introduction of new products and high dispatches before the FY 2022-23 closure to manage internal CAFE figures.

- Introduction of the MG Comet hatchback reinforced the growth momentum in Q2-2023.

- In the ensuing quarters, BEV sales started to decline despite the best-ever festive season for ICE vehicles.

- HEV sales were largely driven by Toyota’s products, and the supply situation was not very consistent across quarters.

- Note here is that the BEV and HEV segments are still in a nascent stage in India, and a very limited range of products are available across the segments.

- The dichotomy between BEV and HEV is the price point and taxation. All current BEV products just attract a 5% incentivized GST rate, and current HEV products are in the 43% GST slab.

- The average car sales price for BEVs is ₹ 15.4 lakhs, and for HEVs it is ₹ 25.1 lakh, with a sales gap of mere 10%

- Bottom line: It is the product with the right value proposition that will alter the market size. The Volvo XC 40 Recharge and BMW iX are prime examples in the luxury segment.




BEV customer dissonance – ‘claimed range!’

Cars with an internal-combustion-engine (ICE) have to undergo emission testing for roadworthiness certification. These tests are carried out in the laboratory on dynamometers, where vehicles remain in static condition. Vehicles have to cover the modified Indian driving cycle (MIDC), and equipment measures the tailpipe emissions. Fuel consumed during this cycle is reported as fuel efficiency by manufacturers; these figures are byproducts of emission testing procedures. During MIDC drive, all auxiliary power systems are switched off, i.e., no AC, no headlamp that consumes additional energy. And the average speed is limited to 32.9 kmph. These conditions are now part of standard testing; however, they vary drastically from real-world operating conditions. Which is why, in real-world conditions, vehicles either don’t meet these figures or sometimes exceed them too.
When it comes to BEVs, as they don’t have a tailpipe, they don’t have to undergo emission testing. However, they are also subjected to MIDC drive, and the range obtained during the test is reported by manufacturers

Here starts the problem: the real range of current BEV products is lower than manufacturers' reported data by 20% to 30% in real-world conditions. A similar gap exists for products tested on the European WLTP (Worldwide Harmonized Light Vehicles Test Procedure) cycle and simultaneously tested in India under MIDC. This is because WLTP is more realistic than MIDC.

Under real-world driving, when such a claimed range is not met, the mental break-even calculation done before the purchase decision goes for a complete toss for early adopters in India. Again, in India, word-of-mouth publicity is pretty strong in product advocacy, and in the age of social media, it gets further pronounced. Dissonance from the current customer base also had an impact on sales in Q3 and Q4 of 2023.

In the case of HEV, customers are much more satisfied as Toyota’s products deliver better fuel efficiency than other ICE fuel offerings.



Manufacturer:

- Tata remains the largest BEV maker in India, with a 72% market share.

- MG and Mahindra have captured a sizable market share in 2023, and the discount was also higher.

- Toyota continues to lead HEV sales with a 78% share.

- Maruti comes next, and Honda’s sales have less traction due to higher pricing.



Body style:

- Hatchbacks with a lower entry price point have a higher BEV segment share of 47%

- SUVs are next at 41%

- Currently, the HEV segment is limited by UV-dominated body styles from Toyota and Maruti



Products:

- The Tata Tiago EV was the best-selling BEV in 2023.

- Amid production constraints on Tata BEVs, Tata seems to have shifted production from Nexon to Tiago.

- Mahindra XUV400, Citroen eC3, and BYD Atto3 had limited sales traction, and discounts were on the higher side.

- The Toyota Innova Hycross was the best-selling HEV in 2023, followed by the Toyota Hyryder.

- Maruti’s HEV offering has limited appeal, as products are on the higher side of the price spectrum.



Outlook for 2024:

- With more BEV products lined up for 2024, especially in SUV/crossover body styles, the BEV market will expand for sure.

- However, range-related dissonance needs to be sorted out, to promote the sales of BEV on their own merit, with less government incentive. Because in the future, if ever fuel prices come down, it will significantly impact BEV sales.



Link:

[avishar]

Originally Posted by OrangeCar

No intention of getting into political debates, I feel the first three charts are a fairly good indicator of economic progress.

From 2004 - 2014, we had a coalition government led by one party. And 2014 - 2024, a single party full majority (even though there a coalition partners, who were not needed to form government).

We start 2004 with 10 lakh vehicles sold. End 2014 with approx 25 lakh vehicles sold. That is 2.5X growth in a decade. Plus, 5 of the 10 years are high double digit growth (25%, 19%, 15%, 17%, 32%). CAGR numbers also point towards high growth years in majority of that decade. This period included the dreaded year 2008 recession as well. Not to forget record high fuel prices (tripe digits per barrel), and government paid subsidies on fuel. Basically, government hands tied with less money to spend on many other things.

From 2014-2024, the numbers are disappointing (except for the psychological positivity of crossing 40 lakh end of year 2023). Most years are single digit growth years (3%, 9%, 7%, 9%, 5%, 8.3%). Massive negative growth of 13% in 2019 (pre-covid, obviously!). And 2021, 2022 growth numbers on back of low base and pent up demand (due to Covid lockdowns). Even CAGR wise, it is a period of moderate growth.

Does this mean the previous government did better in terms of automobile growth rate, consequently economic growth? Has high taxation (GST with cess on cars, much higher fuel taxes) from 2014 onwards hurt economic growth, particularly auto sales growth? Is a single party majority even a good thing for Indians, where there exists no opposition, both within the government (read coalition partners) or outside the government in opposition benches?

Will leave this for the economists on this forum to comment.

(Link to GDP growth data from world bank)

Auto sales in general, across the world, resemble this chart. You can look at emerging, middle income, high achievers and developed country graphs.

This is because of one crucial factor. Average selling prices of cars have grown a lot over the last decade. Which has had an effect on affordability for sure (whether it is USA or Brazil or Europe or China). While we look at unit sales, the revenue accrued from these sales tell a slightly different story, as the product mix has changed. Maruti Suzuki's revenue sales CAGR for eg, has grown at 10-11% between 2014 and today, even with the COVID pandemic. Their profitability has grown even faster, at 15%.

[volkman10]

Fuel Mix Car Sales Analysis - 2023:

Highlights:

- Diesel passenger vehicle sales were stable at 18% of the Indian PV market in the BS6-RDE emission phase.

- CNG car sales grew by 30% in 2023, with a market share gain of 2.2%.

- Petrol vehicle sales growth was a mere 3%, with a market share loss of 3.3%.



Petrol

- Petrol vehicle sales growth was a mere 3%, with a market loss of 3.3%. This is because in the lower price segment, CNG gained share due to a softening of CNG prices and wider offerings.

- Maruti controls 48% of the petrol market, with Swift being the best seller. The average petrol car sales price was close to ₹ 10.3 lakh due to the higher mix of small crossovers now.

Diesel

Diesel car sales volume and overall mix have remained stable in the stricter BS6-RDE phase. This is because Mahindra, Tata, and Hyundai-Kia have shown strong commitment to customer needs for low running costs, uncompromised performance, and practicality offered by diesel engines.

This segment is strongly dominated by SUV/Crossover due to their larger size and weight. And sales of bigger cars take the average car sales price to ₹ 18.2 lakhs. Mahindra is the undisputed leader with 50% of the diesel vehicle market due to its wide array of UV offerings.

Even in the luxury segment, Mercedes and JLR have over 50% diesel mix, which is especially beneficial for their large SUVs. BMW, however, has seen a drop to 33% due to higher sales of its BEV product range.

CNG

CNG car sales grew by 30% in 2023, with a market share gain of 2.2%. This is largely driven by wider product offerings from Maruti, the introduction of innovative dual-CNG tanks from Tata, and the softening of CNG prices. CNG still caters to low-value product offerings, having an average sales price of ₹ 8.7 lakhs and MUVs, with a large contribution coming from fleet operators.


Maruti remains a dominant player with 74% of the CNG market share, and Wagon-R was the best seller at 16% and the preferred choice among shared mobility service providers.

BEV & HEV (Strong hybrid)

Toyota is the leader in this segment. Analysis covered in earlier posts.


Link: