Auto industry body, the Society of Indian Automobile Manufacturers aka SIAM announced on Thursday that India’s passenger vehicle sales hit a record high in the fiscal year 2022-23 as chip shortages eased and customers spent more money on SUVs.

What Happened? Per a Reuters report, automakers focused on producing SUVs due to high consumer demand despite rising inflation. Meanwhile, sales of entry-level vehicles faced challenges.

SIAM President Vinod Aggarwal tells the news wire service that SUV sales, accounting for over 50% of total passenger vehicle sales in the year, were “much higher than expected.”

He added that he expects the Indian auto industry to perform well in 2023-24 if the economy remains strong and monsoons are good since global recessionary concerns have eased.

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SIAM recorded sales to dealers and stated that passenger vehicle volumes for the year rose nearly 27% to 3.9 million units in the year ended March 31, with sales of utility vehicles standing at over 2 million.

Sales rose due to buying before the implementation of new fuel emission norms and strong demand during the festival season.

Additionally, two-wheeler sales, an indicator of the financial health of India’s lower- to middle-income households, rose 16.9%. However, sales of small entry-level cars fell 57% to 252,000 in the last fiscal year from its 2016-17 peak of 583,000 units.

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