PV sales race to new high, GST mop-up above Rs 1.6 trillion

Prior to the busiest festival season, data on domestic passenger vehicle (PV) sales and goods and services tax (GST) collection pointed to a positive macroeconomic environment in the nation.

While the monthly PV sales total of 363,733 units in September set a new record, the GST mop-up of Rs 1.62 trillion, up 10.2% year over year (Y-o-Y), came in third place. In the first half of 2023–24, the average monthly gross GST collection was Rs 1.65 trillion, which was 11% more than in H1FY23.

UPI transactions again exceeded 10 billion for the second consecutive month, though the 10.56 billion count was a little lower than in August. The value of these transactions, at Rs 15.8 trillion, was slightly higher.

The monthly domestic PV sales figure increased year over year by 2.36 percent. This increase may be linked to the start of the festival season, higher production due to better chip availability, and high demand for SUVs (sports utility vehicles). 360,897 units were sold at their highest point in domestic PV sales in August of this year.

The total PV wholesale statistic exceeded 2 million for the first time in any financial year during the first half of FY24. According to Shashank Srivastava, senior executive officer for marketing and sales at Maruti Suzuki India, the festivals were a major factor in the spike in PV sales.

In western India, the month of September included Ganesh Chaturthi and Janmashtami, but in Kerala, the fortunate Chingam month came to a conclusion on September 17.

Due to the significant base effect, Srivastava observed that the year-on-year increase in September appeared rather “muted”. He explained that the number for September 2022, 355,353, was especially high.

The retail sector is currently stocking up for greater sales during Navratri and Diwali, especially in the nation’s northern, eastern, western, and central parts.

Currently, there is enough stock for 30 days at PV sales shops. “This is obviously quite high. We first saw this stock level roughly five years ago. However, the volume was low at the time,” said Srivastava. The top MSIL executive emphasized that the build-up due to the festival season did not make the existing stock levels a reason for concern.

The majority of manufacturers, according to Srivastava, have successfully managed the semiconductor scarcity issue, which has significantly increased SUV output. This was a problem that several producers, including Maruti Suzuki, encountered, especially in the first few months up to July. The SUV market has shown the highest increase in India in recent quarters.

The PV sales for the auto industry were 2.072 million units in the first half of FY24. “This is the first time that the two million number has been cracked in H1 of any year,” he said. H1 sales from the previous year totaled 1.937 million.

3.091 million PV units were sold by the vehicle sector between January and September of 2023. “The 3 million number mark has already been reached for the first time between January and September…This means that both for the calendar year and the financial year, we are on track to meet the 4 million level,” Srivastava added.

Domestic PV sales for Maruti increased 1.64 percent year over year to 150,812 units in September. Hyundai, the second-largest automaker in India, recorded a growth in sales of 9.48% year over year in September.

Hyundai Motor India’s chief operating officer (COO), Tarun Garg, reported that the company’s “highest ever” monthly sales in the nation were recorded in September since its foundation. “Strong sales momentum has been generated by the ongoing festival season… Because of the outstanding consumer reaction to the recently released Hyundai Exter, our already strong SUV offering has been strengthened even further. Over 65% of our domestic sales are now made up of SUVs, he claimed.

Tata Motors, on the other hand, revealed that their PV sales in September decreased by 5.32 percent year over year. In Q2FY24, it introduced the next generation Nexon (based on an internal combustion engine) and Nexon electric vehicle (EV).

According to a statement from Tata Motors’ managing director of the PV and EV division, Shailesh Chandra, “We proactively reduced supplies of the outgoing models this quarter to enable a smooth transition to the new generation models.” In light of the start of delivery for their new-generation products, he anticipates increased volumes during this festival season and beyond.

The third-largest PV manufacturer in India, Tata Motors, reported a 5.32 percent year-over-year decline in PV sales in September. In Q2 of FY24, Tata Motors introduced the new generation Nexon (based on an internal combustion engine) and Nexon electric vehicle (EV). In order to facilitate a seamless transition to the new generation models, “We proactively cut supplies of the outgoing models this quarter. We anticipate increased volumes throughout this holiday season and beyond as deliveries of our exciting new generation products begin, according to Shailesh Chandra, managing director of Tata Motors’ PV and EV unit.

Sonoma Kapoor, the automotive partner at EY Parthenon, told Business Standard that robust demand prevails in the market, and with the festival season just around the corner, the outlook is “exceptionally” positive. “Bookings are abundant in the marketplace, and there is palpable excitement about converting these reservations during the festival period,” he noted.

“However, we must keep a close eye on dealer inventory levels, particularly during the first 15 days of October, a period traditionally considered less auspicious for purchases. There may be some temporary constraints on working capital as we work to bolster inventory levels. Nonetheless, with the industry’s commitment to managing this challenge, we are poised for an outstanding year, potentially achieving our best-ever performance in passenger car sales,” he added.