Anushruti Singh
Automotive retail in India: According to the Federation of Automobile Dealers Association (FADA), total vehicle retail increased by 14 per cent year on year in March 2023. Except for tractors, all categories experienced double-digit growth, with 2-wheelers, 3-wheelers, passenger vehicles and commercial vehicles growing by 12 per cent, 69 per cent, 14 per cent, and 10 per cent, respectively. Tractors, however, only grew by 4 per cent.
Commenting on how March’23 performed, FADA President, Manish Raj Singhania said, “The 2-Wheeler category witnessed a growth of 12 per cent YoY but was down by -9 per cent from its pre-covid levels. Rural India which still has not performed continues to remain under inflationary pressure,”
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According to the data, the 3-wheeler segment achieved record-high automotive retail sales by growing 69 per cent and surpassing the previous high figures of March 2020, which was a month when the industry made the transition from BS-4 to BS6. The Passenger Vehicle segment saw a growth of 14 per cent YoY.
“Better supplies coupled with better sales, though at the upper end of the spectrum kept the meter ticking. This apart from increase in prices of OBD 2A vehicles coupled with multiple festivals in the month kept the sales healthy though inquiry levels have now started decreasing,” said Singhania.
The Commercial Vehicle category has also shown robust growth by growing 10 per cent YoY. Passenger vehicle demand was also healthy during the month Apart from the infra spending by Central Government, OBD Stage 2A price hike coupled with discount offers from OEMs witnessed pre-buying, Singhania informed.
In coming months, El Nino can impact auto sales. US Government agencies have, for a third successive month, reiterated the possibility of El Niño’s arrival later this year. This may result in poor monsoon thus hampering rural India’s growth potential.
Brief Analysis for FY23
During the fiscal year (FY23), total retail increased by 21 per cent. Except for tractors, all categories experienced double-digit growth, with 2-wheelers, 3-wheelers, passenger vehicles, and commercial vehicles increasing by 19 per cent, 84 per cent, 23 per cent, and 33 per cent, respectively. Tractors, on the other hand, increased by only 8 per cent. The 2W segment fell to 7 years low with total retails of 15.9 Mn during the year.
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EV penetration in this category during the year was at 4.5 per cent. The 3-wheeler category maintained its impressive growth rate of 84 per cent year over year. Electrification in this category reached 52 per cent, primarily driven by the e-rickshaw segment.
Retail sales of passenger vehicles reached a record high of 3.6 million vehicles, growing 23 per cent YoY. The previous high was in FY’19 when retail sales were 3.2 million vehicles.
Commenting on how FY23 performed, Singhania said, “FY23 was the first full year without any impact of Covid after a gap of two years. Consequently, overall automotive retail sales during the year experienced double-digit growth. The availability of finance, along with the availability of alternative fuels and state subsidies, has contributed to the growth of this segment,”
“The segment experienced numerous new launches and better product availability due to the easing of the semiconductor shortage during the year. The demand for higher-end variants helped sustain sales,” he adds.
However, the entry-level variant remains under pressure as customers in this category are still affected by high inflation.
