New Delhi [India], India's retail auto sector registered a year-on-year growth of 2.61 per cent in May, the Federation of Automobile Dealers Associations (FADA) highlighted in its vehicle retail data on Monday.
Data shows that two-wheeler sales recorded a positive growth of 2.5 per cent year-on-year, however, passenger vehicle sales declined by 1 per cent. Three-wheeler sales grew by 20 per cent and the commercial vehicle (CV) segment also saw a growth of 4 per cent year-on-year.
However, in the rural economy, tractor sales declined marginally by 1 per cent year-on-year in May.
“In May 2024, the Indian auto retail sector achieved a marginal growth of 2.61 per cent year-on-year.The two-wheeler (2W), three-wheeler (3W) and commercial vehicle (CV) segments grew by 2.5 per cent, 20 per cent and so on. 4 percent while passenger vehicles (PV) and tractors (tracks) were down 1 percent each year. Dealers reported supply shortages, lack of OEM (original equipment manufacturer) marketing activities and the effects of extreme hot weather and elections. Raj Singhania, FADA President.
He further added, “Overall, while the auto retail sector saw mixed results, the industry is navigating significant challenges with cautious optimism for the coming months.,
FADA highlights that the near-term outlook for the automobile retail sector remains cautiously optimistic. The post-election period is expected to bring stability and boost market sentiment, with government continuity likely to boost infrastructure projects and economic activity.
The India Meteorological Department (IMD) has forecast above normal rainfall at 106 per cent of the long period average (LPA), which is expected to boost rural demand and support economic activity. Nevertheless, the reopening of schools in July as well as extreme weather conditions, such as heat waves and heavy rains, may delay the purchase decision.
Despite these positive indicators, FADA said significant challenges remain.Intense competition, lack of new model launches and poor marketing efforts by OEMs are impacting the market. Liquidity issues and high inventory levels are putting pressure on dealership profitability, and while discount schemes and good product availability provide some relief, lower customer inquiries and postponements due to seasonal factors remain worrying.
Additionally, the forecast for above normal rainfall, although generally positive, increases the risk of potential flooding in some areas, which could disrupt the market. Uneven monsoon rains have affected agricultural sector development in the past, and although this year's forecast is promising, it introduces potential uncertainties.
Overall, FADA highlights that favorable economic conditions and the formation of a new government hold the potential for growth, but addressing these ongoing challenges will be important to achieve sustained recovery in the automotive market.
Data shows that two-wheeler sales recorded a positive growth of 2.5 per cent year-on-year, however, passenger vehicle sales declined by 1 per cent. Three-wheeler sales grew by 20 per cent and the commercial vehicle (CV) segment also saw a growth of 4 per cent year-on-year.
However, in the rural economy, tractor sales declined marginally by 1 per cent year-on-year in May.
“In May 2024, the Indian auto retail sector achieved a marginal growth of 2.61 per cent year-on-year.The two-wheeler (2W), three-wheeler (3W) and commercial vehicle (CV) segments grew by 2.5 per cent, 20 per cent and so on. 4 percent while passenger vehicles (PV) and tractors (tracks) were down 1 percent each year. Dealers reported supply shortages, lack of OEM (original equipment manufacturer) marketing activities and the effects of extreme hot weather and elections. Raj Singhania, FADA President.
He further added, “Overall, while the auto retail sector saw mixed results, the industry is navigating significant challenges with cautious optimism for the coming months.,
FADA highlights that the near-term outlook for the automobile retail sector remains cautiously optimistic. The post-election period is expected to bring stability and boost market sentiment, with government continuity likely to boost infrastructure projects and economic activity.
The India Meteorological Department (IMD) has forecast above normal rainfall at 106 per cent of the long period average (LPA), which is expected to boost rural demand and support economic activity. Nevertheless, the reopening of schools in July as well as extreme weather conditions, such as heat waves and heavy rains, may delay the purchase decision.
Despite these positive indicators, FADA said significant challenges remain.Intense competition, lack of new model launches and poor marketing efforts by OEMs are impacting the market. Liquidity issues and high inventory levels are putting pressure on dealership profitability, and while discount schemes and good product availability provide some relief, lower customer inquiries and postponements due to seasonal factors remain worrying.
Additionally, the forecast for above normal rainfall, although generally positive, increases the risk of potential flooding in some areas, which could disrupt the market. Uneven monsoon rains have affected agricultural sector development in the past, and although this year's forecast is promising, it introduces potential uncertainties.
Overall, FADA highlights that favorable economic conditions and the formation of a new government hold the potential for growth, but addressing these ongoing challenges will be important to achieve sustained recovery in the automotive market.
