Retail sales of passenger vehicles went up by 16% on year to 335,123 units last month even as wholesale numbers – what car manufacturers dispatch to dealers – showed a subdued growth of 1.8% to 338,341 units because automakers rationalised shipments to manage stocks.
As per data collated by industry body Federation of Automobile Dealers Association (FADA), two-wheeler registrations rose 33.2% to 1,643,510 units, three-wheelers by 9.3% to 80,105 units, tractors by 1.4% to 56,625 units, and commercial vehicles by 2.3% to 90,707 units in April.
New launches supported growth across two-wheeler and passenger vehicle segments last month, FADA said.
“While some attribute this growth to the shift in Navratri to April instead of March last year, the overall increase was significant. Comparing combined March and April 2024 sales with the same period last year shows a 14% YoY growth for the entire industry,” said Manish Raj Singhania, president of FADA.
Vehicle stocks have been on a rise since July last year amid improved supplies post the easing of the semiconductor crisis.As per estimates, the car industry at present has stocks of 42-45 days, or about 450,000 units, in the network. Several senior industry executives ET spoke to said the growth in wholesale volumes is likely to remain in low single-digits going ahead on account of the high base and better availability of vehicles.Automobile dealers are cautiously optimistic about the near-term outlook. While market opportunities exist with rising customer interest in new models, election-related uncertainty and financial constraints remain key challenges that the industry will need to monitor closely to navigate this evolving landscape effectively, Singhania said.
The two-wheeler segment saw strong growth in April due to improved supply and the increasing demand for 125cc models. “Positive market sentiments, bolstered by stable fuel prices, a favourable monsoon outlook, festive demand and the marriage season, contributed to this rise. New model launches also helped drive growth, despite some delays in supply,” he said.
Singhania, however, said, despite strong bookings and customer flow, high competition, excess supply and discounting presented some challenges for sustained growth. Additionally, the lack of new models in some portfolios impacted market traction.
For commercial vehicles, market conditions are mixed. While dealers reported positive momentum for bulk and corporate deals and demand remained strong for school buses, elections partially dampened sentiment, with customers delaying expansion plans. “Limited finance options and regional challenges such as water scarcity further impacted performance,” Singhania said.
Overcapacity in the CV segment could slow growth, while heavy discounting in the PV segment could impact profitability, he said. Also, seasonal factors such as no-marriage dates and a lack of major festive events may influence demand near-term.
However, Singhania said there are also positive indicators of sales picking up healthily post elections.
“Improved vehicle supply and strategic planning in the two-wheeler segment have led to rising customer bookings and better market sentiment, driven by favourable crop yields,” he said. “In the PV segment, new model launches and favourable monsoon forecasts are set to stimulate customer interest, while bulk deals in the CV segment should bolster demand in sectors like iron ore, steel, and cement.”