The Federation of Automobile Dealers Association (FADA) in its March auto sales report has revealed that there has been only a moderate sales growth of 3.14% year-on-year.
Auto Sales in March
As per the report, sales of two-wheeler saw 5% growth while, three-wheeler segment saw 17% growth. The electric vehicle sales also grew with 2 wheeler EV market share jumping to 9.12% for the first time. However, the sales of passenger vehicles witnessed a downturn of 2% month-on-month in March and 6% decline on-year sales.
As per FADA, the two-wheeler segment showcased resilience even amid economic concerns, election uncertainties and intense competition, showing “strategic evolution”, especially in the premium and electric vehicles.
Also Read: November auto sales surge: Two-wheelers and passenger vehicles lead growth
The three-wheeler segment's growth is amplified with the increasing acceptance of EVs. This depicts an optimistic trend despite potential challenges from election uncertainties.
Like passenger vehicle, the sales of commercial vehicles also fell by 6% on-year due to election-induced purchase slowdowns with strong demand in specific sectors like coal and cement transportation, stated FADA.
"The two-wheeler (2W) and three-wheeler (3W) segments saw increases of 5% and 17% respectively, while passenger vehicles (PV), tractors (Trac) and commercial vehicles (CV) faced declines of 6%, 3%, and 6% respectively. The 2W segment demonstrated resilience and adaptability, with electric vehicle (EV) sales surging due to the expiration of the FAME 2 subsidy on March 31st. This led to a notable boost in the 2W-EV market share to 9.12%”, said FADA President Manish Raj Singhania.
Singhania further added that positive market sentiment was supported by seasonal events,
improved vehicle supply, and financial incentives.
“Despite facing market volatility and intense competition, the industry is strategically evolving, particularly in the premium and EV categories, signalling a bright future. The 3W segment showed an encouraging sales trend hitting an all-time high retail, driven by the growing acceptance of EVs. The introduction of EV autos and loaders positively impacted the retail environment,” he said.
Auto sales in FY24
The auto sales for the financial year 2023-24 saw significant highs achieving a 10% on-year growth. Two-wheelers saw 9%, three-wheelers 49%, passenger vehicles 8.45%, tractors 8% and commercial vehicles 5% growth.
FADA called FY24 a milestone year for passenger vehicle sales. “Factors such as improved vehicle availability, a compelling model mix and the launch of new models played pivotal roles. Enhanced supply dynamics, strategic marketing efforts, ever expanding quality road infrastructure and strong demand in the SUV segment, now holding a 50 per cent market share, significantly contributed to this success,” it added.
Outlook for auto sales
As per FADA, the auto sector faces a nuanced challenge with a notable decline in consumer sentiment among urban Indians due to a restraint in discretionary spending. The Reserve Bank of India's decision to keep repo rates unchanged at 6.50% would continue to “badly impact retail sales of all vehicles, especially entry level vehicles” as these buyers are extremely price sensitive, stated FADA.
“Given the continued inflationary trend without any relief in finance rates, these prospective buyers may continue to hesitate. Coupled with the forthcoming elections, these challenges will influence the Industry, potentially curbing vehicle sales across all segments,” the FADA report added
For FY25, the auto sector is poised for growth amidst a mix of optimism and challenges.
“Heading into FY’25, the Indian Auto Industry is poised for growth amidst a mix of optimism and challenges. The excitement around new product launches, particularly electric vehicles, sets a forward-looking tone. Manufacturers are gearing up with better supply chains and an array of models to meet diverse consumer demands. Economic growth, favourable government policies and an anticipated good monsoon are expected to fuel demand, especially in rural areas and the commercial vehicle sector, which is closely linked to infrastructure projects and economic activity,” stated FADA for the lon-term outlook
