The automotive retail sales in the country are on a growth path, and barring the tractor segment albeit a high year-ago base, a double-digit uptick was seen across segments.
For FY2023, the overall automotive retail came at 22,150,222 units, which was 21 percent higher YoY. In terms of segment wise performance, the two-wheeler sales came at 15,995,968 units (+18.54%), three-wheeler at 767,071 units (+83.90%), passenger vehicle at 3,620,039 units (+23.04%), tractor at 827,403 (+7.94%) and commercial vehicles at 707,186 units (+32.88%).
In March, the total retails came at 2,041,847 units, which was 13.89 percent higher compared to same period last year.
According to Manish Raj Singhania, President, Federation of Automobile Dealers Association (FADA), “March continued to witness double-digit growth of 14 percent YoY. All categories except tractors witnessed double-digit growth. Two-wheelers, three-wheelers, passenger vehicles and commercial vehicles saw a growth of 12 percent, 69 percent, 14 percent, and 10 percent, respectively. Tractors, however, only grew by 4 percent.”
The two-wheeler category witnessed a growth of 12 percent YoY but was down by 9 percent from its pre-covid levels. The reason can be attributed to the fact that rural India still continues to remain under inflationary pressure. The three-wheeler segment achieved record-high retail sales by growing 69 percent and surpassing the previous high figures of March 2020, which was a month when the industry made the transition from BS4 to BS6.
The passenger vehicle segment grew by 14 percent on the back of improved supplies coupled with better sales, though at the upper end of the spectrum kept the meter ticking.
“This apart from an increase in prices of OBD 2A vehicles coupled with multiple festivals in the month kept the sales healthy though inquiry levels have now started decreasing,” added Singhania.
The commercial vehicle category grew by 10 percent.
“The passenger movement vehicles demand was also healthy during the month apart from the infra spending by Central Government, OBD Stage 2A price hike coupled with discount offers from OEMs witnessed pre-buying,” he noted.
Two-wheeler sales fall to 7-year low in FY2023
After a gap of two years, the fiscal year 2023 was the first full year without any impact of Covid. While the overall retail sales during the year experienced double-digit growth, the two-wheeler segment retails fell to 7-year low (compared to pre-Covid) with sales of 15.9 million units during the year. The penetration of electric vehicles in the category came at 4.5 percent.
The three-wheeler category maintained impressive growth with penetration of electric vehicles reaching 52 percent, which was primarily driven by the e-rickshaw segment. The availability of finance, along with the availability of alternative fuels and state subsidies, has contributed to the growth of this segment.
FADA states that retail sales of passenger vehicles reached a record high of 3.6 million vehicles, growing 23 percent YoY. The previous high was in FY’19 when retail sales were 3.2 million vehicles. The segment experienced numerous new launches and better product availability due to the easing of the semiconductor shortage during the year. The demand for higher-end variants helped sustain sales. However, the entry-level variant remains under pressure as customers in this category are still affected by high inflation.
FY2024 could see single-digit growth
The auto retail body states that as the high-growth period has now passed, FY 2024 is expected to see tapered growth in the low-single digits due to a high base, inflationary pressures, routine price hikes, and regulatory changes.
Additionally, for the third consecutive month, US government agencies have warned of the possibility of El Nino’s arrival later this year, which could lead to poor monsoons, hampering rural India’s growth potential. The untimely rains and hailstorms in North and Central India have destroyed key rabi crops and delayed harvesting, which will have a negative impact on rural sales. The year will also witness high EV penetration which will eat into ICE market share.
FADA expects that FY2024 will be a year of consolidation for the Indian auto retail industry with an overall single-digit growth over the previous year.
| AUTOMOTIVE RETAIL SALES IN INDIA | ||||||
| CATEGORY | MAR’23 | MAR’22 | Change (in %) | FY23 | FY22 | Change (in %) |
| Two-wheeler | 14,45,867 | 12,86,109 | 12.42% | 1,59,95,968 | 1,34,94,214 | 18.54% |
| Three-wheeler | 86,857 | 51,483 | 68.71% | 7,67,071 | 4,17,108 | 83.90% |
| E-RICKSHAW(P) | 37,373 | 20,756 | 80.06% | 3,50,247 | 1,60,065 | 118.82% |
| E-RICKSHAW WITH CART (G) | 3,250 | 2,338 | 39.01% | 24,224 | 14,467 | 67.44% |
| THREE WHEELER (GOODS) | 10,541 | 8,043 | 31.06% | 90,111 | 72,668 | 24.00% |
| THREE WHEELER (PASSENGER) | 35,611 | 20,257 | 75.80% | 3,01,877 | 1,69,384 | 78.22% |
| THREE WHEELER (PERSONAL) | 82 | 89 | -7.87% | 612 | 524 | 16.79% |
| Passenger vehicle | 3,35,266 | 2,93,016 | 14.42% | 36,20,039 | 29,42,273 | 23.04% |
| Tractor | 81,067 | 78,070 | 3.84% | 8,27,403 | 7,66,545 | 7.94% |
| Commercial Vehicles | 92,790 | 84,124 | 10.30% | 9,39,741 | 7,07,186 | 32.88% |
| LCV | 49,745 | 50,200 | -0.91% | 5,54,585 | 4,38,802 | 26.39% |
| MCV | 6,050 | 5,116 | 18.26% | 60,818 | 48,005 | 26.69% |
| HCV | 33,119 | 26,247 | 26.18% | 2,93,796 | 1,97,365 | 48.86% |
| Others | 3,876 | 2,561 | 51.35% | 30,542 | 23,014 | 32.71% |
| Total | 20,41,847 | 17,92,802 | 13.89% | 2,21,50,222 | 1,83,27,326 | 20.86% |
