The Federation of Automobile Dealers Associations (FADA) has released Vehicle Retail Data for April 2023. As per the data, the financial year 2023-24 kicked off with a modest vehicle retail performance in April, seeing a decline of 4% in total vehicle retails.
Sales of two-wheeler and passenger vehicles declined by 7% and 1% last month compared to April 2022, respectively. However, sales of the three-wheelers witnessed a healthy year-on-year growth of 57% with Tractor and CV experiencing marginal growth of 1% and 2%, respectively.
In its latest report, FADA says that the passenger vehicles sales witnessed a YoY degrowth for the first time in eight months. The sales of entry-level two-wheelers is still down by 19% when compared to the pre-covid levels in April 2019. They contributed to a 12% decline in total vehicle retails.
The passenger vehicle segment sales slowed down in April 2023, with retails decreasing by 1% YoY. “This was primarily due to last year's high base and the OBD 2A norms, which led to vehicle price increases and advanced purchases in March,” says FADA President Manish Raj Singhania.
He adds: “Although supplies are improving, there is a significant mismatch between customer demand and available inventory. Furthermore, entry-level PVs have fewer buyers, suggesting that customers at the bottom of the pyramid are still hesitant to upgrade from 2-wheelers to 4-wheelers. For the first time in eight months, the PV segment witnessed a YoY degrowth, potentially signalling a tapering demand in this segment.”
FADA also warns about unfavourable weather conditions in April impacting entry-level 2-wheeler and passenger car sales in the country. It says that untimely rains and hailstorms can cause crop damage in several states, exacerbating farmer concerns and potentially impacting entry-level 2-wheeler and passenger car sales.
Urging OEMs to recalibrate their inventory and prioritize the production and supply of products that are in high demand, FADA says that the marriage season in May is expected to provide a slight boost in sales for the current month.
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