April Sees Modest Growth in India's Automobile Sales: What You Need to Know
Overview of Automobile Sales in April
New Delhi: In April, India's overall automobile retail sales experienced a slight increase of 2.95%, reaching a total of 2,287,952 units. This uptick was attributed to consumer purchases coinciding with various festivals such as Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi, and Vishu, according to the Federation of Automotive Dealers Associations (FADA).
The total sales for April 2024 were reported at 2,222,463 units, as stated by FADA.
Sales figures showed positive growth across all categories except for commercial vehicles (CV), with two-wheelers, three-wheelers, passenger vehicles (PV), and tractors increasing by 2.25%, 24.5%, 1.5%, and 7.5%, respectively, while CVs saw a decline of 1%.
In April, two-wheeler sales reached 1,686,774 units, up from 1,649,591 units in the same month last year, marking a 2.25% increase.
Passenger vehicle sales also saw a rise, with 349,939 units sold last month compared to 344,594 units in April 2024, reflecting a growth of 1.55%.
FADA President C S Vigneshwar noted that the pause in the tariff war led to a significant rebound in stock markets, easing investor worries. This environment encouraged consumers to finalize purchases during the festive season, contributing to a positive sales outcome for April.
He highlighted that two-wheeler sales showed a strong upward trend, growing 2.25% year-on-year and 11.84% month-on-month, indicating stable demand despite various challenges.
Vigneshwar mentioned that dealers reported increased inquiries in rural areas following the Rabi harvest, driven by good crop yields, healthy reservoir levels, and a favorable monsoon forecast. Additionally, the wedding season helped sustain rural sales.
Urban demand remained strong, bolstered by the introduction of new models, although high financing costs and adjustments related to the new emission norm 'OBD2B' created some challenges.
The passenger vehicle segment, despite limited new model launches, recorded a 1.55% year-on-year increase, although it saw a slight month-on-month decline of 0.19%. This performance was attributed to discounts in the market and high inventory levels, with approximately a 50-day supply available, which affected consumer purchasing behavior.
Vigneshwar emphasized that sustained demand for SUVs supported sales, even as entry-level buyers remained cautious. He urged original equipment manufacturers (OEMs) to adjust production and reduce stock levels to avoid excessive discounts and carrying costs at dealerships.
FADA continues to recommend a 21-day inventory standard at dealerships to improve market responsiveness and cost efficiency.
In terms of commercial vehicles, retail sales fell by 1.05% to 90,558 units compared to 91,516 units in April 2024. Conversely, tractor sales increased by 7.56% to 60,915 units, up from 56,635 units in the same month last year.
The three-wheeler segment experienced a significant rise of 24.51%, with sales reaching 99,766 units last month compared to 80,127 units in April 2024.
Looking ahead, FADA's feedback suggests a mixed outlook for May across all segments. While passenger vehicle sales are expected to remain steady but subdued as buyers await new model releases and deal with high financing costs, two-wheeler sales may benefit from marriage season and post-harvest demand. However, tighter credit criteria from financiers could impact customer access to loans.
Commercial vehicles are anticipated to remain flat due to a high base effect, slower e-commerce activity, and increasing competition from electric three-wheelers. Nonetheless, targeted OEM incentive programs and upcoming infrastructure projects may provide some relief.