Retail auto sales in India rose 10% in 2023-24; electric vehicles signal bright future

In break up, the two-wheeler (2W) and three-wheeler (3W) segments saw increase in retail sales of 5 per cent and 17 per cent, respectively, while passenger vehicles (PV), tractors and commercial vehicles (CV) faced declines of 6 per cent, 3 per cent, and 6 per cent respectively.

Following is a table detailing the sales figures category wise:

The dealers association said with the expiration of the subsidy under FAME 2 on March 31, led to a notable increase in electric vehicle sales, with the 2W-EV market share jumping to 9.12 per cent.

"Positive market sentiment was supported by seasonal events, improved vehicle supply, and financial incentives. Despite facing market volatility and intense competition, the industry is strategically evolving, particularly in the premium and EV categories, signalling a bright future," said FADA President, Manish Raj Singhania.

Despite economic concerns, election uncertainties and intense competition, the 2W segment showcased strategic evolution, especially in the premium and electric vehicles.

The passenger vehicle segment faced a downturn with a 2 per cent month-on-month and a 6 per cent year-on-year sales decline, attributed to heavy discounting and selective financing.

The sales in commercial vehicle segment which fell by 6 per cent year-on-year navigated through a complex environment, balancing election-induced purchase slowdowns with strong demand in specific sectors like coal and cement transportation, FADA noted.

For entire 2023-24, retail sales achieved a notable 10 per cent year-on-year growth, with the 2W, 3W, passenger vehicle, tractor and commercial vehicle segments registering growth rates of 9 per cent, 49 per cent, 8.45 per cent, 8 per cent and 5 per cent respectively, setting record highs in the 3W, passenger vehicle and tractor categories.

In the just-concluded financial year, the 2W segment experienced a 9 per cent growth, fuelled by enhanced model availability, the introduction of new products and a positive market sentiment, alongside the burgeoning EV market and strategic premium segment launches.

"The 3W segment showed an encouraging sales trend hitting an all-time high retail, driven by the growing acceptance of EVs. The introduction of EV autos and loaders positively impacted the retail environment," said Singhania.

Outlook:

FADA said with a notable decline in consumer sentiment among urban Indians, as reported by the Centre for Monitoring Indian Economy (CMIE), the automotive sector faces a nuanced challenge.

This downturn, characterised by a restraint in discretionary spending within urban income brackets, adds a layer of complexity to the industry's landscape.

In this scenario, the decision of the monetary policy committee of the RBI to keep lending rates unchanged at 6.5 per cent would continue to badly impact the retail sales of all vehicles, especially entry level vehicles as these buyers are extremely price sensitive.

Given the continued inflationary trend without any relief in finance rates, these prospective buyers may continue to hesitate, FADA argued.

Coupled with the forthcoming elections, these challenges will influence the Industry, potentially curbing vehicle sales across all segments, it added. (ANI)