The Federation of Automobile Dealers Associations (FADA) has released its latest vehicle retail data for April 2024, showing a 27% year-on-year (YoY) growth. This uptick highlights a promising shift in the auto retail industry, with overall increases spanning across various segments. The combined retail figures for March-April 2024 also rose, showing a 14% YoY growth compared to the same period last year.
The auto retail surge in April was led by a substantial 33% YoY increase in the two-wheeler (2W) segment, attributed largely to improved supply chains and a rising demand for 125cc models. The three-wheeler (3W) segment saw a 9% growth, while passenger vehicles (PV) rose by 16% YoY. Commercial vehicles (CV) and tractors had modest gains of 2% and 1% respectively.
FADA President Manish Raj Singhania pointed out several factors contributing to this growth. Stable fuel prices, a positive monsoon outlook, and the festive and marriage seasons played significant roles. He noted, 'The shift of Navratri to April, as opposed to March last year, also provided a substantial boost to the sales figures this spring.'
The CV segment benefited from bulk and corporate deals, especially in school bus sales, which helped sustain its growth despite a slight month-on-month decline of 0.6%.
The auto retail market, however, is navigating through uncertainties such as the ongoing election period, which has caused some customers to delay their purchasing decisions and expansion plans. Financial constraints and limited financing options continue to pose significant challenges, impacting buyer sentiment and potentially slowing growth.
The industry also faces physical challenges such as overcapacity in the CV segment and extreme summer temperatures, which could further decelerate market progress.
Looking forward, the outlook for May 2024 appears cautiously optimistic. Singhania elaborates, 'Improved vehicle supply and strategic planning, particularly in the 2W segment, have led to rising customer bookings. The PV segment is likely to see an upswing due to new model launches and favourable monsoon forecasts, and bulk deals in the CV sector should bolster demand.'
The landscape remains complex with ongoing election-related uncertainties and financial constraints. The industry anticipates these factors could impact the market significantly, affecting both demand and profitability.
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