Passenger vehicle, two-wheeler retail sales dip in April, says FADA

May 04, 2023 07:48 pm | Updated 09:28 pm IST - New Delhi

Image used for representative purpose only.

Image used for representative purpose only. | Photo Credit: PTI

Passenger vehicle and two-wheeler retail sales witnessed a drop in April while three-wheelers, tractors and commercial vehicles witnessed an increase in registrations last month, automobile dealers’ body FADA said on May 4.

Passenger vehicle retail sales in India slipped 1% year-on-year to 2,82,674 units last month, as buyers advanced purchases to March in order to avoid enhanced prices on account of stricter emission norms kicking in from April 1.

FADA noted that it is the first time in eight months that the passenger vehicle segment witnessed a year-on-year degrowth, potentially signalling a tapering demand.

“The passenger vehicle segment, which achieved record sales in FY23, slowed down in April... This was primarily due to last year’s high base and the OBD 2A norms, which led to vehicle price increases and advanced purchases in March,” Federation of Automobile Dealers Associations (FADA) president Manish Raj Singhania said in a statement.

FADA urged the PV OEMs to recalibrate their inventory and prioritise the production and supply of products that are in high demand, ensuring a more efficient alignment between market demand and available inventory.

“Despite the ongoing chip shortages and somewhat sluggish market conditions, the marriage season in May is expected to provide a slight boost in sales for the current month,” it said.

Two-wheeler registrations also declined by 7% to 12,29,911 units in April as against 13,26,773 units in the year-earlier period.

The drop in sales can be attributed to limited supplies due to the OBD 2A shift, untimely rains and pre-buying in March, Mr. Singhania said.

Model mix availability, rural sentiment and demand in the two-wheeler motorcycle segment remained weak, he added.

“The rural economy has yet to show significant progress. Compared to the pre-COVID April 2019, two-wheeler sales are still down by 19%,” Mr. Singhania noted.

While noting that the segment continues to face challenges with entry-level vehicles attracting fewer buyers, FADA urged the GST Council to consider reducing GST on two-wheelers from 28 to 18% to help revive the segment, which represents 75% of the total auto sales volume.

Three-wheeler retail sales, however, rose by 57% to 70,928 units last month from 45,114 units in April 2022.

Similarly, commercial vehicle registrations were up 2% to 85,587 units in April from 83,987 units in the year-earlier period.

Tractors’ retail sales witnessed an increase of 1% to 55,835 units last month as against April 2022.

Retail sales across categories declined by 4% to 17,24,935 units last month as against 17,97,432 units in April 2022.

FADA said it maintains a cautious stance for May with untimely rains and hailstorms, causing crop damage in multiple states.

“This exacerbates concerns for farmers and may potentially impact entry-level two-wheeler and passenger car sales,” it added.

FADA, which represents over 15,000 automobile dealers, said it had collated the April registration data from 1,350 out of 1,436 regional transport offices (RTOs) across the country.

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