Like in Pakistan, the rich in India have more to spend. Hence, sales of SUVs soar
Business
Sales of Indian smaller cars skid in December, even discounted rates didn’t work
LAHORE/BENGALURU (Web Desk) – Sales of sports utility vehicles (SUVs) rose in December, while small car sales fell despite high discounts, Reuters said in a report which showed the latest data released by Indian automakers on Monday.
While sales of entry-level vehicles remain slow due to inflation, automakers have benefited from the sales of premium vehicles, catering to a more well-off demographic largely unaffected by higher prices, it added.
We in Pakistan can relate with what is happening across the border. Our roads and streets too showcase expensive SUVs and cars – obviously bought by the affluent classes – who have plenty of money to spend.
It is in complete contrast to the sufferings of ordinary people – an overwhelming majority – who have been crushed by rising inflation and shrinking purchasing power amid stagnant wages.
Hence, the prevailing economic crisis – a product of high inflation and interest rates – is widening rich-poor divide by accelerating concentration of wealth – an alarming development for a country like Pakistan where economic inequality and lack of industrial base was already a serious challenge.
Read more: Pay gap widening at an alarming rate: At least bank executives are under scrutiny
Reuters says Maruti Suzuki and Mahindra & Mahindra reported domestic SUV sales growth of 24 per cent and 39pc year-on-year, respectively.
Indian carmakers' SUV segment has benefitted from strong demand through the last year.
Mahindra, which makes SUVs such as the Thar, Scorpio and XUV, had multiple months of record sales in the category in 2023. It has seen 20pc-57pc sales growth each month this financial year so far.
Sales of SUVs have formed 36pc of Maruti's domestic passenger vehicle (PV) so far this fiscal year, compared with 22pc last fiscal, while accounting for almost all of Mahindra's PV sales.
The year-end, where automakers usually provide larger discounts, coupled with low demand for entry-level vehicles, prompted Maruti to increase discounts on its lesser-priced models by 40pc to 45pc.
However, sales of its small cars like the Alto and Baleno were down 29pc. That was also, in part, due to Maruti's moderation of wholesales.
Tata Motors reported an 8pc growth in domestic PV sales, without specifying the growth rates of different categories of cars.
Among two-wheelers, Bajaj Auto's and TVS Motor's domestic sales jumped 26pc and 27pc respectively, while Eicher Motors' Royal Enfield motorcycle sales fell 7pc.
Bajaj and other two-wheeler makers benefited from the wedding season that took place during the first half of the month, analysts have said.
