3-Wheeler And CV Segments Maintain Positive Momentum In April 2023 – Report


The Federation of Automobile Dealers Associations (FADA) released Vehicle Retail Data for April’23.

Commenting on April 2023’s performance, FADA President Mr Manish Raj Singhania stated, “Financial Year 2024 began on a subdued note, with the month of April experiencing a 4% YoY overall decline. Although the 3-wheeler segment enjoyed robust growth of 57% YoY, the Tractor and CV segments only grew by a modest 1% and 2%, respectively. Meanwhile, the 2-wheeler and Passenger Vehicle categories
experienced YoY degrowth of 7% and 1%, respectively.

The 2-wheeler segment’s continued low sales, with a 7% YoY decrease, can be attributed to limited supplies due to the OBD 2A shift, untimely rains, and pre-buying in March. Model mix availability, rural sentiment, and demand in the 2-wheeler motorcycle segment remain weak. The rural economy has yet to show significant progress. Compared to the pre-COVID April 2019, 2-wheeler sales are still down by 19%.

Thanks to high demand in the e-rickshaw and passenger segments, the 3-wheeler segment has grown by 57% YoY and also surpassed pre-COVID levels at a healthy rate.

The Passenger Vehicle segment, which achieved record sales in FY23, slowed down in April, with retail decreasing by 1% YoY. This was primarily due to last year’s high base and the OBD 2A norms, which led to vehicle price increases and advanced purchases in March. Although supplies are improving, there is a significant mismatch between customer demand and available inventory. Furthermore, entry-level PVs have fewer buyers, suggesting that customers at the bottom of the pyramid are still hesitant to upgrade from 2-wheelers to 4-wheelers. For the first time in eight months, the PV segment witnessed a YoY degrowth, potentially signalling a tapering demand in this segment.

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The CV segment maintained positive momentum with a 2% YoY increase in retail sales. However, dealers reported that vehicle availability was a major concern due to the OBD 2A norms. The low base from last year also contributed to the positive growth.”

The 2-wheeler segment continues to face challenges, with entry-level vehicles attracting fewer buyers. FADA urges the GST Council to consider reducing GST on 2-wheelers from 28% to 18% to help revive this vital segment, which represents 75% of total auto sales volume. On the other hand, the upcoming marriage season in May is expected to bring about a sales resurgence, driven by an increase in customer inquiries. Additionally, as electric vehicles (EVs) gain popularity, customers are increasingly considering transitioning from internal combustion engines (ICE) to EVs, which may temporarily delay purchasing decisions.

The Commercial Vehicle (CV) segment is witnessing strong demand in the M&HCV segment, supported by robust infrastructure projects taking place nationwide. Improved product supply from OEMs and customer adaptation to price shifts contribute to the segment’s growth.

In the Passenger Vehicle (PV) segment, rising inventory levels are raising concerns. FADA urges OEMs to recalibrate their inventory and prioritize the production and supply of products that are in high demand, ensuring a more efficient alignment between market demand and available inventory. This will ultimately benefit both customers and manufacturers. Despite the ongoing chip shortages and somewhat sluggish market conditions, the marriage season in May is expected to provide a slight boost in sales for the current month.

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Unfavourable weather conditions persist in May, including untimely rains and hailstorms, causing crop damage in multiple states. This exacerbates concerns for farmers and may potentially impact entry-level 2-wheeler and passenger car sales.

India’s electric vehicle market is rapidly expanding, with a variety of companies making strides in the industry. According to All India Vehicle Retail Data for April 2023, Ola Electric Technologies Pvt Ltd has become the market leader, accounting for 21,882 units sold, representing a market share of 1.78%.

Meanwhile, Ampere Vehicles Private Limited sold 8,318 units, representing 0.68% of the market, followed closely by Ather Energy Pvt Ltd, which sold 7,746 units, representing 0.63% of the market. Other companies, such as Hero Electric Vehicles Pvt. Ltd and Piaggio Vehicles Pvt Ltd, accounted for smaller market shares at 0.27% and 0.24%, respectively. Okaya EV Pvt Ltd made its debut on the list, selling 1,562 units, while other EV manufacturers contributed to 8,684 units sold, amounting to 0.71% of the market. The data shows that the Indian electric vehicle market is growing at a fast pace, with many companies making a significant impact in the industry.

Bajaj Auto Ltd. has once again emerged as the leader in the three-wheeler OEM market share for the month of April 2023, according to the latest industry data. The company’s market share stood at 35.1%, up from 32.38% in the same period last year. Piaggio Vehicles Pvt Ltd came in second with a market share of 8.0%, up from 10.52% in April 2022. Mahindra Group and Mahindra & Mahindra Limited also saw an increase in their market share, reaching 6.0% and 5.5%, respectively.

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However, Mahindra Reva Electric Vehicles Pvt Ltd saw a significant decrease in its market share, dropping to 0.4% from 2.38% in April 2022. Other companies including YC Electric Vehicle and Saera Electric Auto Pvt Ltd also experienced an increase in their market share.

Overall, the three-wheeler OEM market saw a significant increase in sales, with the total market share reaching 70,928 in April 2023, up from 45,114 in the same period last year. The rise in demand is attributed to the growing need for last-mile connectivity in urban and rural areas, as well as the shift towards cleaner energy sources.

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