The passenger vehicle (PV) segment declined 1% year on year (YoY) in May due to the impact of elections, extreme heat and market liquidity issues, the Federation of Automobile Dealers Associations (FADA) said. “Despite better supply, some pending bookings and discount schemes, the lack of new models, intense competition and poor marketing efforts by OEMs affected sales,” FADA president Manish Raj Singhania said in a statement.
“Additionally, increased customer postponements and low enquiries further contributed to the challenging market conditions. Due to the extreme heat, the number of walk-ins to showrooms dropped by about 18%,” he added.
Overall in May 2024, the Indian auto retail sector witnessed a modest 2.61% YoY growth, with two-wheeler (2W) growing 2.5%, three-wheeler (3W) growing 20%, and the commercial vehicle (CV) segment growing by 4% YoY.
Besides PVs, the tractor segment also witnessed 1% YoY decline in sales. The two-wheeler segment witnessed supply constraints, lack of OEM marketing activities and impacts from extremely hot weather and elections, according to dealers.
“Positive rural demand due to expected good monsoon and improved finance availability were also noted which kept the counters ticking,” Mr. Singhania said. According to FADA, the CV segment too was impacted by the elections and extreme climatic conditions. “Despite growth due to a low base from last year and increased bus orders, the industry faced challenges from wholesale pressures, government policy effects, and negative market sentiment,” Mr. Singhania said.
“Additionally, good movement in market loads, cement, iron ore, and coal sectors contributed positively,” he added.
