Overall, the Indian automobile market has witnessed a resurgence across the various segments for the month of May 2023. This was revealed in the retail sales figures announced by the Federation of Automobile Dealers Associations (FADA).
Commenting on May 2023 performance, FADA President Manish Raj Singhania stated,"May has been an encouraging month for the auto retail industry, demonstrating a robust 10% YoY growth across all vehicle categories. We have witnessed a resurgence in the 2W, 3W, PV, Tractor, and CV segments with growth rates of 9%, 79%, 4%, 10%, and 7% respectively. While there has been a slight -2% decline compared to pre-COVID levels, the overall retail figures have shown improvement. The 2W and CV sales did continue to face some challenges, recording high single digit setback of -8% and -7% respectively”.
Electric Vehicles (EVs) made impressive strides this month, contributing to 8% of the total vehicle retail. This was buoyed by a surge in 2W EV sales that contributed 7% and 3W EV sales contributing a substantial 56% of their respective total sales. The CV and PV categories also marked their presence in the EV landscape, with respective contributions of 0.5% and 2.5%.
The 2W sales were positively influenced by seasonal factors like the marriage season, changes in the FAME subsidies effective from June, and the recovery of rural demand, which hint towards a promising future in the aftermath of the COVID-19 pandemic.
In the Passenger Vehicle segment, the improved availability of vehicles, the strength of pending orders, and the robust demand for new launches drove a positive momentum, helping the segment rebound after a slump in the previous month.
The Commercial Vehicle segment experienced sustained growth, underpinned by the government's focus on infrastructure development. The bus segment displayed a notable increase, driven by improved financing options and higher sales in academic institutions.
Near Term Outlook
The auto retail sector faces diverse challenges across the 2W, CV and PV segments. For 2W, seasonal factors could boost demand, but concerns like weather-induced walk-in reductions, inventory, and regulatory norms persist. The CV sector anticipates improved vehicle availability but concerns about RDE norms and seasonal effects may impact sales. The PV sector expects increased demand, particularly for new models, Compact &full-sized SUVs and EVs, but inventory pressure and right model availability could pose challenges.
FADA advocates for a balanced auto retail ecosystem, urging collective action to regulate inventory levels, negotiate lower interest rates and support 2W Dealers by eliminating illegal MBO sales. While acknowledging near-term challenges, FADA maintains a stance of cautious optimism, highlighting the potential for growth through collaborative efforts and alignment with market trends.
The anticipated stable interest rates by RBI's Monetary Policy Committee could maintain vehicle demand and positively impact auto sales. However, supply chain issues, demand-supply dynamics, and regulatory changes also play a role in shaping the auto retail outlook.
Key Findings from our Online Members Survey
• Inventory at the end of May’23
O Average inventory for Passenger Vehicles ranges from 40-45 days
O Average inventory for Two – Wheelers ranges from 15-20 days
O Neutral 42.65%
O Good 37.75%
O Bad 19.61%
O Neutral 43.63%
O Good 32.84%
O Bad 23.53%
Chart showing Vehicle Retail Data for May’23
All India Vehicle Retail Data for May’23
YoY % (2022)
E-RICKSHAW WITH CART (G)
THREE WHEELER (GOODS)
THREE WHEELER (PASSENGER)
THREE WHEELER (PERSONAL)
Source: FADA Research
The above numbers do not have figures from TS& LD.
Vehicle Retail Data has been collated as on 03.06.23in collaboration with Ministry of Road Transport & Highways, Government of India and has been gathered from 1,350 out of 1,436 RTOs.
Commercia Vehicle is subdivided in the following manner
LCV – Light Commercial Vehicle (incl. Passenger & Goods Vehicle)
MCV – Medium Commercial Vehicle (incl. Passenger & Goods Vehicle)
HCV – Heavy Commercial Vehicle (incl. Passenger & Goods Vehicle)
Others – Construction Equipment Vehicles and others
3-Wheeler is sub-divided in the following manner
E-Rickshaw – Passenger
E-Rickshaw – Goods
3-Wheeler – Goods
3-Wheeler – Passenger
3-Wheeler – Personal
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