The Indian passenger vehicle market is expected to carry forward the momentum of this year to the next purely driven by economic fundamentals, having already moved beyond pent-up demand-induced growth, according to Toyota Kirloskar Motor Executive Vice President & Country Head Vikram Gulati.
While the SUVs are expected to witness fast growth in general in 2024, the mid to higher end of the segment will also see faster acceleration, although the small cars category will remain a concern.
"I think the market is growing. It will continue to grow in a very healthy way. We are well beyond the part when people were saying this is pent-up demand. We have built much beyond that, and the festive season has seen very good pickup," Gulati told PTI when asked about the outlook for 2024.
He further said, "Going forward, I think the fundamentals are good. In terms of the economic forecast, our economy continues to be stable and growing amidst a very turbulent environment."
Despite the shocks of the happenings in Ukraine and in the Middle East, Gulati said, "We've been largely insulated. So that augurs well, plus this also brings positive sentiment. Therefore, it means that going forward, spending is going to be good in terms of people wanting personal mobility."
As per industry estimates, total sales of Passenger Vehicles (PVs) in India are expected to cross the 40 lakh unit mark in 2023. In 2022, PV sales were at 37.93 lakh units, against 30.82 lakh in 2021.
Gulati said the current shift towards SUVs will continue to happen next year with more consumers willing to pay an additional amount for better features and safety.
"In terms of performance and convenience, I think there is a very clear sign that customers will not compromise on that."
"What that basically means is going forward, we'll see much of the current trend magnifying itself. Even within the SUVs, we see the mid to higher and SUVs growing...," he said.
However, Gulati said, "The challenge as we see today is more towards the smaller car segment. That will be interesting to see how that plays out."
Asked about the growth prospects of Toyota Kirloskar Motor (TKM), Gulati said, "For the rest of the market where we operate, we think it is going to continue to be good and positive."
TKM is set for a record year in terms of sales in 2023. It has already clocked 1.92 lakh units in the January-October period of 2023, beating the previous highest yearly sales of 1.72 lakh units sold in 2012.
Asked about Toyota's plans to introduce electric vehicles in India, he said, "We are evaluating the Indian market situation continuously. Our stated goal is to look at the real purpose why we bring electrification, which is to move away from fossil fuels and rapid decarbonisation."
Towards that, the company will continue to explore all technology options, which are best suited to the current Indian condition in terms of the energy mix, the infrastructure readiness, as also consumer adoption, and take a call accordingly in terms of any of the technologies, he added.
"We have all these technologies, we can introduce, and therefore, we have the ability to introduce any one of these and we will take a call as we go along, based on our assessments from time to time," Gulati asserted.