Passenger vehicle (PV) sales in India have been experiencing significant growth, and this trend is expected to continue. In FY23, PV sales in India saw a historic 27% growth, with 3.9 million units sold. According to an Olx Crisil Mobility report, PV sales are projected to grow at a moderated pace of 6-8% in FY24. Looking at the long-term, a healthy growth rate of 5-7% CAGR is projected.

Several factors have contributed to the continuous growth of passenger vehicle sales in India. Firstly, the country’s growing middle class with increasing disposable income has created a larger pool of potential car buyers. This, in turn, has generated a demand for feature-rich models and prompted new model launches in the market. Data compiled by JATO Dynamics shows that 42 new car models, including 23 new ones and 19 facelifts, have been introduced in the market in the first 11 months of the calendar year.

Additionally, one of the key factors driving sales is India’s low car-penetration ratio compared to most of the global car markets. With a car penetration ratio of 24 per 1,000 people, India’s ratio is much lower than the world average of 314. This means that there is still significant untapped potential in the Indian car market. Comparatively, Italy has the highest car penetration ratio with 673 cars per 1,000 people, followed by Germany with 583 and France with 559.

Furthermore, even on a state-wise level, car penetration in India remains low due to a low per-capita income. Except for Delhi, where car penetration stands at 103, most other states have a penetration rate below 40 per 1,000 people.

The growth in passenger vehicle sales in India is a positive sign for the country’s automotive industry. It reflects the increasing purchasing power of the middle class and the high demand for cars. As the middle class continues to grow and disposable incomes increase, the demand for passenger vehicles is expected to remain strong.

In conclusion, passenger vehicle sales in India have been on a promising growth trajectory. Factors such as a growing middle class, increasing disposable incomes, and a low car-penetration ratio compared to global markets have contributed to this growth. With a projected 6-8% growth in FY24 and a long-term CAGR of 5-7%, India’s passenger vehicle market is set to gain further momentum.