Indian carmakers post record sales in 2023 on back of SUV boom

Market leaders Maruti Suzuki, Hyundai Motor India, Tata Motors and Toyota Kirloskar Motor reported their best-ever annual sales in 2023.

Driven by feverish demand for sports utility vehicles (SUVs), passenger vehicle sales in the country reached a record high of 41.08 lakh units in 2023, up 8.3% year-on-year, with most car makers like Maruti Suzuki, Hyundai Motor India, Tata Motors and Toyota Kirloskar posting their best ever year.

Automotive executives are confident that with strong economic growth and not much in the way of domestic headwinds, this trend could continue in 2024 as well.

Nearly half of all passenger vehicles (PVs) going from the assembly line to dealers were SUVs, which means more Indians are gravitating towards cars costing Rs 10 lakh or more.

“If you look at January to December 2023, wholesales crossed 41.08 lakh. This is the first time the industry has ever crossed the 4 million mark. That, I think is a huge milestone in the history of the Indian PV industry,” Maruti Suzuki’s senior executive officer (marketing and sales) Shashank Srivastava said in an interaction with reporters.

Srivastava further said the industry estimate for retail sales in 2023 is 40.51 lakh against 37.30 lakh in 2022, at a growth of 8.6%. “Most of the growth in the industry was largely driven by SUVs, which grew by 26%,” he said.

Sales of SUVs as a share of total PV sales went up to 48.7% in 2023 from 42% in 2022. However, in a sign that many among the salaried class find themselves priced out from the new car market, the share of hatchbacks (mostly entry-level cars) has come down to 30% from 34.8%.

“This is the first time ever in a calendar year that Maruti Suzuki’s total sales exceeded 2 million units. This was also the highest ever rural sales at 7.76 lakh and highest ever pre-owned car sales at 4.68 lakh,” Srivastava said, adding the company’s premium retail outlet NEXA also clocked its best ever annual sales at more than 5 lakh units.

Srivastata said that the contribution of SUVs to the overall PV sales is likely to saturate at around 50-55%, going forward.

“We see a lot of positive sentiment. The economy continues to grow and the stock markets are doing well. India appears to be a bright spot in the global economy,” said Tarun Garg, Hyundai Motors (HMIL) India chief operating officer. Garg said that he sees a 3-5% sales growth for Hyundai in India in 2024, and that 65% of the company’s domestic sales will come from SUVs. 

HMIL reported a 9% year-on-year increase in total sales at 7,65,786 units in 2023, its highest ever. Domestic sales were also up 9% at 6,02,111 units

“For Tata Motors, 2023 was the third consecutive year of posting highest ever sales of around 5.53 lakh units led by its commanding position in the compact SUV segment and strong growth in hatches, despite the hatch segment de-growing at an industry level,” Tata Motors Passenger Vehicles Ltd managing director Shailesh Chandra said.

On the industry crossing the significant 4 million mark, he said it has been “supported by a strong supply situation, new models launched in the SUV segment, and a robust demand during the longer festive period”.

Toyota Kirloskar Motor (TKM) also reported its best ever annual sales with a 46% growth in wholesales at 2,33,346 units in 2023. “The consistent month-on-month performance, coupled with a year-round upward trend, indicates a growing customer interest in all our line-up of cars,” TKM Vice President of Sales and Strategic Marketing Atul Sood said.