Auto sales to decline in FY24 after seeing 21% growth in FY23
NEW DELHI: Auto dealers body FADA on Tuesday said automobile sales in financial year 2023-2024 (FY24) is expected to see tapered growth in the low single digits due to a high base, inflationary pressures, routine price hikes, and regulatory changes.
Federation of Automobile Dealers Associations of India (FADA) also said the untimely rains and hailstorms in North and Central India have destroyed key rabi crops and delayed harvesting, which will have a negative impact on rural sales. “Overall, FY24 will be a year of consolidation for the India Auto Retail Industry with an overall single digit growth over previous year,” said FADA.
For the third consecutive month, US Government agencies have warned of the possibility of El Niño’s arrival later this year, which could lead to poor monsoons, hampering rural India’s growth potential.
According to data issued by FADA, overall retail sales during the year experienced double-digit growth of 21% at 2.21 crore units. All categories except for tractors saw double-digit growth, with 2-wheelers, 3-wheelers, passenger vehicles (PV), and commercial vehicles growing by 19%, 84%, 23%, and 33%, respectively.
Manish Raj Singhania, President of FADA, said, “Retail sales of PVs reached a record high of 36 lakh vehicles, growing 23% YoY. The previous high was in FY’19 when retail sales were 32 lakh vehicles. The segment experienced numerous new launches and better product availability due to the easing of the semiconductor shortage during the year.”
Singahnia added that electric vehicle penetration in the two-wheeler segment in FY23 was at 4.5%. This year will also witness high EV penetration which will eat into combustion engine market share. Electrification in the three-wheeler category reached 52%, primarily driven by the e-rickshaw segment.
Meanwhile, auto retail sales across segments in the month of March rose 13% year-on-year to 20,41,847 units