The Federation of Automobile Dealers Associations (FADA) has unveiled its latest Vehicle Retail Data for April 2024, showcasing a robust 27% year-on-year growth in the Indian auto retail sector. The data, released highlights notable expansions across various segments, including two-wheelers (2W), three-wheelers (3W), passenger vehicles (PV), tractors (Trac), and commercial vehicles (CV).
FADA President, Mr. Manish Raj Singhania, commented on the sector’s performance, attributing the impressive growth to multiple factors. The 2W segment, for instance, witnessed significant expansion, buoyed by enhanced supply and rising demand for 125cc models. Similarly, the PV category experienced double-digit growth, supported by improved model availability and favorable market sentiments, particularly during festive occasions like Navratri and Gudi Padwa.
The comprehensive report outlines key highlights and challenges faced by the industry:
Key Highlights:
- Overall Growth: The Indian Auto Retail sector achieved a 27% year-on-year growth in April 2024, with the combined March-April period showing a 14% year-on-year increase.
- Segment Growth: Two-wheelers (2W) grew by 33% year-on-year, Three-wheelers (3W) increased by 9% year-on-year, Passenger Vehicles (PV) achieved a 16% year-on-year growth, Tractors (Trac) grew by 1% year-on-year, and Commercial Vehicles (CV) experienced a modest 2% year-on-year growth.
- Market Factors: Positive market sentiment was driven by stable fuel prices, positive monsoon outlook, festive demand, and the marriage season. New model launches supported growth across 2W and PV segments despite some supply delays. Bulk and corporate deals bolstered demand for CVs, particularly in school bus sales.
Challenges Identified:
- Election Impact: Election uncertainty is affecting customer sentiment, leading to delayed purchasing decisions and expansion plans.
- Financial Constraints: Limited financing options and financial constraints pose growth challenges.
- Overcapacity and Extreme Summers: Overcapacity in the CV segment and rising temperatures could further slow growth.
Near-Term Outlook: Despite challenges, the industry remains cautiously optimistic due to rising interest in new models and strategic planning. However, careful monitoring of election-related uncertainty and financial challenges is crucial to navigate the evolving market effectively.
The report also includes insights from an online members survey, providing valuable perspectives on liquidity, sentiment, and expectations for May 2024.
The comprehensive data, collated in collaboration with the Ministry of Road Transport & Highways, Government of India, offers a comprehensive overview of the auto retail landscape, guiding stakeholders in navigating the dynamic market conditions effectively.
