In April 2023, the first month of FY2023-24, while auto wholesales were in the green, retail sales slowed down as prospective buyers preponed purchases to March to avert the increased prices on vehicles on account of stricter emission norms, which came into force from April 1.
According to Federation of Automobile Dealers’ Association (FADA) data, retail sales of passenger vehicles (PVs) in India declined by 1 percent to 2,82,674 units in April 2023, compared to 2,86,539 units in the same month last year.
"The PV segment, which achieved record sales in FY23, slowed down in April... This was primarily due to last year's high base and the on-board diagnostics (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," FADA President Manish Raj Singhania said in a statement.
For the first time in eight months, the PV segment witnessed a year-on-year (YoY) degrowth, potentially signalling a tapering demand in this segment, as per FADA.
‘Entry-level PVs have fewer buyers’
“Furthermore, entry-level PVs have fewer buyers, suggesting that customers at the bottom of the pyramid are still hesitant to upgrade from two-wheelers to four-wheelers,” added Singhania.
However, two-wheeler registrations declined by 7 percent to 12,29,911 units in April, as against 13,26,773 units in the year-ago period. Singhania claims that the decline in sales 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 two-wheeler motorcycle segment remain weak,” Singhania said. “The rural economy is yet to show significant progress. Compared to the pre-COVID April 2019, two-wheeler sales are still down by 19 percent," Singhania noted.
Three-wheeler retail sales stood at 70,928 units last month, up 57 percent, compared to 45,114 units in April 2022. Similarly, commercial vehicle registrations were up 2 percent to 85,587 units in April from 83,987 units in the year-ago period.
Retail sales of tractors also witnessed an increase of 1 percent to 55,835 units from April 2022. Retail sales across categories declined by 4 percent to 17,24,935 units last month as against 17,97,432 units in April 2022.
FADA also flagged its concerns about unfavourable weather conditions in April impacting entry-level 2-wheeler and passenger car sales in the country. The auto retail body believes that untimely rains and hailstorms can cause crop damage in several states, exacerbating farmer concerns and potentially impacting entry-level two-wheeler and passenger car sales.
Urging OEMs to recalibrate their inventory and prioritise the production and supply of products that are in high demand, FADA says the marriage season in May is expected to provide a slight boost in sales for the current month.
(With inputs from PTI)
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
