FADA reports a 1 per cent decline in domestic sales, but two and three-wheelers see growth
Domestic passenger vehicle retail sales saw a 1 per cent decline year-on-year in May due to extreme summer heat and election-related factors, according to the Federation of Automobile Dealers Associations (FADA). Registrations dropped to 3,03,358 units from 3,35,123 units in May 2023. FADA President Manish Raj Singhania attributed the decline to elections, heat and market liquidity issues.
Despite improved supply, pending bookings and discount offers, the lack of new models and poor marketing by original equipment manufacturers (OEMs) also hurt sales. Increased customer postponements and an 18 per cent drop in showroom walk-ins due to the heat were additional challenges.
However, two-wheeler sales rose 2 per cent to 15,34,856 units, driven by positive rural demand and better financing availability. Three-wheeler sales jumped 20 per cent to 98,265 units and commercial vehicle sales increased by 4 per cent to 83,059 units.
Singhania noted that the near-term outlook for automobile retail is cautiously optimistic. He expects government formation to stabilise and improve market sentiment, along with better supplies and positive trends in key sectors. Above-normal monsoon rains could enhance rural demand and support economic activities, although extreme weather and school re-openings in July might delay purchases. Persistent challenges include intense competition, lack of new model launches and inadequate marketing efforts by OEMs. FADA collected data from 1,360 out of 1,503 RTOs across the country.
