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Informist, Wednesday, Oct. 15, 2025

 

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--SIAM: CV sector saw broad-based sales growth in Q2
--CONTEXT: Comments by SIAM President Shailesh Chandra at an event in Delhi
--SIAM: Car despatches were severely impacted by logistical issues in Sept
--SIAM: Real impact of GST cut will be seen in car sales November onwards
--SIAM: Sept total vehicle exports at 558,768 units, up 19.8% on year
--SIAM: Share of utility vehicles in PV sales stabilising after sharp growth
--SIAM: Sales in rural areas showing strong signs of growth of late
 

 

By Anand JC

 

NEW DELHI – A string of policy measures, such as the goods and services tax cut, income tax break, and repo rate cut by the Reserve Bank of India, may push the annual growth rate in despatches of passenger vehicles back to the historical trend of 6-8% going forward, Shailesh Chandra, president of the Society of Indian Automobile Manufacturers, told Informist on the sidelines of a press conference on Wednesday. SIAM had pencilled in a growth rate of 1-2% for the passenger vehicle industry for 2025-26 (Apr-Mar) before the tax cuts were announced, but has not rejigged growth expectations as it awaits more clarity on the demand sentiment. 

 

Chandra said the recent surge in demand seen after the GST rate cut was only "noise" and mostly pent-up demand. The industry body expects the real picture of consumer sentiment to show up only in the last two months of 2025. As a rule of thumb, if the country's GDP grows at 'x' rate, the passenger vehicle industry grows 1.1-1.2 times that rate, Chandra said.

 

While steep price cuts in the prices of entry-level cars have spurred enquiries since September, Chandra said it is still early to conclude that this sub-segment is seeing some revival. "There is a lot of noise right now because of pent-up demand and all, but if not now, then when?" he said. "Rates have been cut to the bare minimum, so we should definitely see an impact," Chandra said. He is also the managing director of Tata Motors Passenger Vehicles Ltd. and Tata Passenger Electric Mobility Ltd.

 

Indian companies sold dealerships 7.07 million automobiles in the September quarter, just over 6% higher than the year-ago quarter. Two-wheeler sales in this period grew a shade over 7% on year to 5.56 million units while despatches of passenger vehicles fell by over a percent on year to 1.04 million units. Within the passenger vehicle segment, growth in sales of the passenger car segment was muted while despatches of utility vehicles fell just over 2% on year in the latest quarter. 

 

"Actually, if you see the first two months of Q2 (Jul-Sept), the decline was even more. But in September, we saw the revival with 5%+ growth," Chandra said. Growth in sales of this segment would have been much higher if not for logistical issues, which "severely hampered" the offtake, he said.

 

Wholesale sales of commercial vehicles grew just over 8% on year to 239,781 units. While the segment saw broad-based growth during the quarter, the goods segment gained further. 

 

Despatches of utility vehicles have been moderating year-on-year over the last few months. Chandra said that this decline was not very material and the share of sport utility vehicles in the overall passenger vehicles sold is stabilising. 

 

"There was a lot of launch activity in the SUV segment, and those cycles have now possibly been completed. This is why you are seeing stabilisation of volumes in these areas," Chandra said. "I don't see any alarm bells as far as SUV growth is concerned. Pent-up demand for SUVs is over, the product cycle is more stable," he added.

 

Automobile despatches, which remained strong in the urban areas, also showed signs of growth in rural areas during the latest quarter. "Given that we had a good monsoon, I think rural areas should show robust growth in the coming months," he said. Chandra expects this surge in automobile sales to sustain beyond the festival season as dealerships could not fulfil demand fully due to logistical issues.   End

 

Edited by Akul Nishant Akhoury

 

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