FADA: Automobile Retail Sales Show Signs Of Growth With 2.95 PC Uptick

Overall automobile retail sales in India grew a modest 2.95 per cent in April this year to 22,87,952 units with completion of purchases by customers around Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi and Vishu helping April end on a positive note, Federation of Automotive Dealers Associations said on Monday. Total automobile sales in India in April 2024 stood at 22,22,463 units, Federation of Automotive Dealers Associations (FADA) said in a statement.

All categories except commercial vehicles (CV) closed in the green, with two-wheelers, three-wheelers, passenger vehicles (PV) and tractor up 2.25 per cent, 24.5 per cent, 1.5 per cent, and 7.5 per cent, respectively, while CVs declined 1 per cent, FADA said.

Two-wheeler retail sales in April this year stood at 16,86,774 units as against 16,49,591 units in the same month last year, up 2.25 per cent.

PV retail last month stood at 3,49,939 units as compared to 3,44,594 units in April 2024, up 1.55 per cent, it added.

"With the tariff war paused, stock markets staged a sharp pullback -- alleviating investor concerns -- and customers thus leveraged Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi and Vishu to complete purchases, helping April end on a positive note," FADA President C S Vigneshwar said.

He said two-wheeler retail volumes demonstrated a resilient up-cycle -- growing 2.25 per cent year-on-year and accelerating 11.84 per cent month-on-month, underscoring a stable demand environment amid mixed headwinds.

"Dealers reported buoyant enquiry growth in rural areas post-Rabi harvest, driven by strong crop yields, healthy reservoir levels and a favourable monsoon outlook, while wedding-season tailwinds sustained rural offtake," Vigneshwar said.

Urban demand remained robust, supported by new-model introductions, although elevated financing costs and new emission norm 'OBD2B'-linked price adjustments posed isolated bottlenecks, he added.

The PV segment, despite limited model introductions, registered a 1.55 per cent year-on-year increase alongside a marginal 0.19 per cent mom-on-month decline, Vigneshwar said, adding, "this performance reflects a discount-led market and elevated inventories -- approximately a 50-day supply -- amid cautious consumer sentiment that tempered enquiry-to-sale conversions".

"Sustained SUV demand underpinned volumes even as entry-level customers remained cautious, underscoring the need for OEMs to recalibrate production and reduce stock levels to mitigate deeper discounts and carrying costs at dealerships," he said.

FADA continues to advocate a 21-day inventory norm at dealerships to enhance market responsiveness and cost efficiency, Vigneshwar said.

CV retail sales last month declined 1.05 per cent to 90,558 units as against 91,516 units in April 2024. On the other hand, tractor retail grew 7.56 per cent to 60,915 units, compared to 56,635 units in the year-ago month.

Three-wheeler segment witnessed a robust 24.51 per cent rise at 99,766 units last month as compared to 80,127 units in April 2024, FADA said.

On the outlook, FADA said dealer feedback paints a nuanced picture for May across all segments with PV retails expected to hold steady but muted, as buyers await new-model roll-outs and contend with elevated financing costs.

In two-wheelers, FADA said, "Marriage-season and post-harvest demand should underpin enquiries, yet financiers are tightening customer-level credit criteria -- higher CIBIL requirements and down-payment mandates -- despite broader banking-system liquidity. Summer heat and school holidays may further suppress showroom visits though IMD predicts that it may not be as bad as last year." CVs are likely to trade flat, weighed down by a high-base effect, slower e-commerce activity and intensifying competition from electric three-wheelers; targeted OEM incentive schemes and forthcoming infrastructure projects offer some offset, it added. PTI RKL TRB