Festivals, ‘expensive’ OBD norm to push auto sales in March
NEW DELHI: Auto sales are expected to log healthy growth in March on the back of festivals and forced buying due to the implementation of new pollution norms, from April, which will increase vehicle prices.
“March has multiple festivals like Holi, Ugadi, Gudi Padwa, Navratri and more.
This will help push auto sales. Apart from this, better availability of vehicles, the last month of the financial year FY23, change in OBD (on-board diagnostic system for emission control) norms from April will increase vehicle prices. The industry may see schemes being rolled out by original equipment manufacturers (OEMs), aiding higher sales,” said FADA on Monday.
Automobile retail sales in February 2023 grew by 16% year-on-year (YoY) to 17.75 lakh units, shows data released by the Federation of Automobile Dealers Association (FADA). However, the numbers were still below the pre-Covid-19 pandemic levels as sales in February 2023 were 8% lower than the pre-covid month of February 2020, showed the data.
Raising some near-term concerns, the dealer association body said that a sharp slowdown in private consumption expenditure to a 2-year low suggests a softening in household spending demand amid inflationary pressure as post covid pent-up demand starts to fade.
Add to it, the finance ministry’s predictions of a return of El Niño conditions in the Pacific could presage a weaker monsoon in India, resulting in lower output and higher prices. This will act as a dampener for auto sales. “While March looks good for auto sales, on a medium-term outlook, FADA remains cautious till the time a better monsoon forecast is not announced by IMD,” said FADA.
Commenting on February sales, Manish Raj Singhania, FADA president, said, “Launch of new models, improving supply coupled with a healthy booking to cancellation ratio and wedding bells kept the momentum going for this already well-to-do segment.”
