April 9, 2024
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The auto retails grew 10 per cent in FY24
Auto retails in March registered a growth of 3.14 per cent on a YoY basis even as passenger vehicles, commercial vehicles and tractors saw a decline.
With the expiration of FAME-II subsidy on March 31, e-2W sales rose, with the category seeing a market share bump to 9.12 per cent for the first time ever.
Upcoming Lok Sabha took a toll on sales of PVs, CVs and tractors however. PV segment fell 2 per cent on a MoM basis and a 6 per cent YoY due to heavy discounting and selective financing
CV segment, down 6 per cent YoY in March, “navigated through a complex environment, balancing election-induced purchase slowdowns with strong demand in specific sectors like coal and cement transportation,” FADA said.
2Ws’ sales in March rose 5 per cent, while 3Ws grew 17 per cent. The former’s growth was supported by seasonal events, improved vehicle supply and financial incentives.
The 3W segment continued to perform well, hitting an all-time high retail buoyed by higher EV acceptance.
“Although faced with election-related uncertainties and concerns over policy changes, such as free bus travel for women, the overall outlook for the sector remains upbeat, supported by the quality of vehicles and strong market demand,” FADA said.
The auto retails grew 10 per cent in FY24, with two-wheelers, three-wheelers, PVs, tractors and CVs booked a growth of 9 per cent, 49 per cent, 8.45 per cent, 8 per cent and 5 per cent respectively. 3Ws, PVs and tractors set a record high in FY24, FADA said.
PV sales hit a record high in FY24 owing to improved vehicle availability, a compelling model mix and the launch of new models. CVs saw improved vehicle supply, effective planning, and increased freight movement drove significant replacement purchases, FADA said.
Auto sector outlook
The organisation said that automotive sector in India is currently facing a nuanced challenge, troubled by the decline in consumer sentiment in the urban areas.
“This downturn, characterized by a restraint in discretionary spending within urban income brackets, adds a layer of complexity to the industry’s landscape,” FADA said.
In the near-term, auto sector also faces challenges due to the upcoming LS polls, however, it can gain from certain festive occassions.
“Given the continued inflationary trend without any relief in finance rates, these prospective buyers may continue to hesitate. Coupled with the forthcoming elections, these challenges will influence the Industry, potentially curbing vehicle sales across all segments,” FADA said.
“Despite this, opportunities for rebound and growth linger, bolstered by festive occasions and strategic product unveilings aimed at reviving consumer interest,” it added.
Overall, for FY25, the automotive market in India is cautiously optimistic. The industry is banking on improved customer engagement and financing schemes to boost sales.
“However, it faces challenges like high base in PV segment and intense competition. The focus is on overcoming these hurdles with innovation and strategic market,” FADA said.
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