The Federation of Automobile Dealers Associations (FADA) unveiled its May 2024 Vehicle Retail Data, indicating a 2.61% year-on-year (YoY) growth in the Indian auto retail sector. The report, released by FADA President Mr. Manish Raj Singhania, highlighted various segment performances and market dynamics.
Segment-wise Performance:
- Two-wheelers (2W), three-wheelers (3W), and commercial vehicles (CV) segments experienced growth of 2.5%, 20%, and 4% respectively, while passenger vehicles (PV) and tractors (Trac) saw a decline of 1% each YoY.
- Notably, the two-wheeler segment grew by 2.5% YoY but faced a 6.6% month-on-month (MoM) decline due to factors like supply constraints, reduced OEM marketing, and adverse weather conditions.
- The PV segment witnessed a -1% YoY growth and a -9.5% MoM decline, primarily attributed to election impacts, market liquidity issues, and a lack of new models.
Market Factors:
- Positive rural demand, anticipated due to favorable monsoon forecasts and improved finance availability, contributed to steady sales.
- Supply chain disruptions, coupled with extreme weather conditions and election-related uncertainties, affected customer sentiment and footfall, with showroom walk-ins dropping by approximately 18%.
Challenges and Outlook:
- Challenges such as election impacts, liquidity issues, and weather extremes persisted, with dealers cautiously optimistic about post-election stability and government continuity.
- Positive outlooks include expectations of enhanced rural demand due to above-normal monsoon forecasts and increased economic activities.
EV Segment Insights:
- The EV market saw notable contributions from players like Hero MotoCorp Ltd., Honda Motorcycle and Scooter India (P) Ltd., and TVS Motor Company Ltd., with varying market shares.
Conclusion:
While the auto retail sector experienced mixed results, hopes are pinned on post-election stability and favorable economic conditions. Addressing challenges like extreme weather impacts and intense competition remains critical for sustained growth in the automotive market.
