Car sales on ‘fleet’ street accelerate 95% in FY23

The industry estimates that 137,000 vehicles were sold to fleet operators in the last financial year, a growth of 95% compared to FY22.

Fleet sales are expected to grow by over 40% this financial year, though it will still be short of the peak of 225,000 units sold to fleet operators in FY19. Overall sales of passenger vehicles are expected to grow by 5-7% this fiscal.

Senior industry executives expect vehicle sales to the taxi segment and cab aggregators to continue to rise and outpace overall growth in the passenger vehicle segment, albeit on a low base, in the coming months, buoyed by increasing commuting and travelling post-pandemic, as well as a push for electric vehicles (EVs).

Fleet sales had fallen by 23% and 69%, respectively, year-on-year in FY20 and FY21 as the outbreak of Covid-19 in early 2020 kept vehicular movement at a bare minimum.

With the reopening of schools, colleges and offices, fleet sales grew 30% on-year in FY22, followed by a 95% rise last fiscal.

At market leader Maruti Suzuki, sales to the fleet segment already touched the pre-pandemic peak of about 113,000 units in the previous fiscal. The company said robust demand from the tourism sector has helped boost commercial sales.Maruti Suzuki has a share of 83% in the fleet segment in India. “Travel and tourism have been the biggest drivers of car sales to commercial operators,” said Shashank Srivastava, senior executive director (marketing and sales).

“With the health scare that erupted with the pandemic receding, people have started becoming comfortable using shared mobility. We expect strong double-digit growth in fleet sales this fiscal,” said Srivastava of Maruti.

The World Health Organization (WHO) on Friday ended the “global health emergency” status for Covid-19, more than three years after it declared its highest level of alert over the virus.

Fleet sales accounted for 17% of incremental sales in the passenger vehicle segment last fiscal, when about 820,000 additional units were sold over the previous year. “This (ride-hailing) business is now doing well and is very profitable,” Bhavish Aggarwal, cofounder and chief executive of Ola Cabs, told ET in a recent interaction. “During Covid, we faced some supply issues… When supply went down, customer experience was affected. Now, with supply coming back and with our operational rigour, customer experience is improving.”

Shailesh Chandra, managing director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, confirmed rising demand from the fleet segment.

“Starting of both official and leisure air travel, commencement of ‘work-from-office’ and increasing intracity travel are some of the important factors behind bringing the rhythm of travel back to our roads,” Chandra said. “We are getting balanced demand from fleet operators, serving corporate fleet and e-hailing companies.”

The homegrown auto major, in fact, has inked agreements to supply around 40,000 electric vehicles to the likes of Uber and BluSmart in the last few months.

Tata Motors currently has the X-Pres T EV sedan on offer for commercial operators.

Upward Trajectory
Additionally, with the central and state governments looking at replacing more than half a million diesel and petrol cars with electric vehicles, fleet sales will only head north mid-term, industry insiders said.

“The demand for EVs in the fleet segment will continue to show promising growth,” Chandra said. “The government’s objective of electrifying its fleet and commitment of corporates for moving towards sustainable mobility along with significant operational cost advantage and a pleasant drive will help propel the growth.”