Indian auto sales post growth in April

8 May 2024 , 12:12 PM

Lok Sabha elections might have some adverse impact on consumer sentiments, but steady fuel costs and the introduction of new models drove a 27% annual gain in the sales of auto industry in India in April, according to a news release from FADA on Wednesday.

According to the auto body, retail sales of two-wheelers climbed by 33%, while sales of three-wheelers, passenger cars, commercial vehicles, and tractors increased by 9%, 16%, and 2%, respectively. In April, the tractor segment experienced a 1% growth.

Positive market mood in April helped auto retails, and this sentiment was fueled by stable fuel costs, a promising monsoon outlook, festival demand, and the marriage season.

A combination of better supply and higher demand for 125cc models led to the 2W segment’s growth. “Despite some supply delays, new model launches also contributed to growth,” FADA President Manish Raj Singhania stated.

Due to ‘improved’ model availability and positive market attitude, especially during festive occasions like Navratri and Gudi Padwa, the PV segment had double-digit year-over-year growth, according to FADA.

But the industry is nevertheless plagued by intense rivalry, oversupply, and product undercutting, which has become a barrier to the sector’s continued expansion. Additionally, the absence of new models in certain portfolios had an impact on market traction.

Positive momentum was observed in the commercial vehicle segment due to demand for school buses and corporate purchases. But consumers’ optimism was undermined by the impending general elections, which caused them to postpone their expansion plans.

“Limited finance options and regional challenges such as water scarcity further impacted performance,” stated FADA.

May offers a number of encouraging signs for the sector, including enhanced supply, better market attitude, and new electrified models in several markets. But there are still issues, according to FADA.
“Market sentiment is still impacted by election uncertainty, which slows customer conversion rates and defers purchases. Financial limitations, high temperatures, and overcapacity in the CV category could hinder expansion, while significant discounts in the PV segment could have an adverse effect on profitability, according to FADA.

The industry believes that seasonal variables that affect demand include marriage dates and the absence of significant holidays.

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