Federation of Automobile Dealers Association (FADA) has stated that the Indian auto retail sector recorded a robust 27% year-on-year (YoY) growth in April 2024, with the combined March-April period showing a 14% YoY increase. It noted that two-wheeler sales picked up 33% on-year, while three-wheeler sales increased 9% on-year. Tractors also grew 1% YoY and commercial vehicles experienced a modest growth of 2% on year. The passenger vehicle (PV) segment achieved a 16% on-year growth.
According to FADA, the outlook for May 2024 is shaped by several positive indicators. Improved vehicle supply and strategic planning in the 2W segment have led to rising customer bookings and better market sentiment, driven by favourable crop yields. In the PV segment, new model launches and favourable monsoon forecasts are set to stimulate customer interest, while bulk deals in the CV segment should bolster demand in sectors like iron ore, steel, and cement. The appeal of new electric models and sustained demand for conventional vehicles are likely to provide further momentum.
It further said despite these positive trends, challenges remain. Election uncertainty continues to affect market sentiment, delaying customer conversions and stalling purchasing decisions. Financial constraints, extreme temperatures, and overcapacity in the CV segment could slow growth, while heavy discounting in the PV segment could impact profitability. Seasonal factors such as no marriage dates and a lack of major festive events may also influence demand. The auto industry remains cautiously optimistic about its near-term outlook. Market opportunities exist with rising customer interest in new models. However, election-related uncertainty and financial constraints remain key challenges that the industry will need to monitor closely to navigate this evolving landscape effectively.
