Two wheeler sales lag behind as overall vehicle retail sales drop in April: FADA

Automobile News Updates: The Federation of Automobile Dealers Associations (FADA) has recently released its Vehicle Retail Data for the month of April 2023, revealing a decline of 4% in total vehicle retails as compared to the same month last year. While passenger vehicles witnessed a decline of 1%, sales of two-wheelers and three-wheelers fell by 7% and 57% respectively. The tractor and commercial vehicle segments, on the other hand, saw marginal growth of 1% and 2%.

Sales of entry-level two-wheelers remain 19% below pre-COVID levels, causing a 12% decline in total vehicle sales,

as per FADA. Additionally, passenger vehicle sales slowed in April 2023, decreasing 1% YoY, mainly due to last year's high base and OBD 2A norms, leading to increased vehicle prices and advanced purchases in March, according to FADA's President Manish Raj Singhania.

Singhania also mentioned that while there is progress in the supply chain, there is still a substantial gap between what customers want and what is currently in stock. Additionally, the entry-level passenger vehicle segment is struggling with fewer purchasers, indicating that those at the lower end of the market are still

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reluctant to switch from two-wheelers to four-wheelers. This is the first time in eight months that the PV category has seen a YoY decline, which may suggest that demand in this segment is beginning to level off.

FADA cautioned that the entry-level 2-wheeler and passenger car sales were affected by unfavorable weather conditions in April. Inclement weather like untimely rains and hailstorms can cause crop damage, which can impact farmer sentiment and consequently entry-level 2-wheeler and passenger car sales.

FADA requested OEMs to adjust their inventory to meet high demand and prioritize production accordingly.

Although May's wedding season could boost sales slightly, FADA stressed the need for caution due to the ongoing pandemic situation and possible weather-related problems.

FADA's report highlights the challenges faced by the Indian automotive industry, which has been struggling with declining sales for some time now. The entry-level two-wheeler and passenger car segments, in particular, have been hit hard due to the pandemic-induced economic slowdown and rising fuel prices. The industry is looking towards the government for support in the form of GST cuts and other policy measures to boost demand and stimulate growth.