Passenger vehicle sales in India are poised to cross the 3 million units milestone this financial year as new models and compact SUVs serve pent up demand from customers with better disposable incomes in both urban and rural areas.
Already, in the first six months of the year, passenger vehicle (PV) segment has already witnessed a growth of 12.34 per cent at 14,94,039 units.
In the last financial year, 27,89,678 passenger vehicles were sold in the domestic market.
"The way it has been so far in the current financial, I expect the passenger vehicles segment to touch 3 million mark. If sales grow as they have grown in the April-September period then we can see this happen," SIAM Deputy Director General Sugato Sen said.
Expressing similar optimism, Abdul Majeed, Partner - Price Waterhouse and an auto expert said many favourable factors are pushing passenger vehicles sales in India towards that direction.
"We should cross 3 million vehicles (mark). The positive factors essentially include better cash flows in the hands of both urban and rural customers," he said.
He added, "In addition pent up demand and new launches push customers to buy new vehicles, cab aggregators will also generate demand since they are expanding to more number of cities."
Overall, industry observers have pegged India to overtake Germany in 2016 as the world's fourth largest automotive market after China, US and Japan.
In 2015, China was the leading passenger vehicle market with 21 million units followed by the US at 7.5 million units, Japan stood at third place with 4 million units, followed by Germany at around 3 million vehicles.
India stood at fifth position with 2.7 million vehicles followed closely by the UK at 2.6 million units, Majeed said.
During the April-September period, utility vehicles segment sales have grown by 40.24 per cent at 3,73,504 units compared to 2,66,339 units in the same period of 2015-16.
Car sales on the other grew by 5.11 per cent 10,26,526 units in the April-September period as against 9,76,586 units in the same period of previous financial.
In September, domestic passenger vehicle sales grew at 19.92 per cent, touching highest volumes in over four-and-a-half years, led by record sales in the utility vehicles segment.
According to the data released by the Society of Indian Automobile Manufacturers (SIAM), PV sales in September stood at 2,78,428 units as against 2,32,170 units in the same month in 2015.