NEW DELHI: A sustained momentum in showroom dispatches of Maruti Suzuki India with sales of 1,37,201 passenger vehicles, Tata Motors sales of 46,847 cars and Hyundai Motor India with sales of 45,703 cars in March 2023 stimulated passenger vehicle retail sales to a year-on-year 14 per cent growth last month.
Festivals, along with the transition to OBD-2A norms, played a crucial role in sustaining the sales momentum of PVs, as shown by monthly figures for March 2023 released by the Federation of Automobile Dealers Associations (FADA) on Tuesday.
Total vehicle retail sales in March 2023 continued to witness double digit growth of 14 per cent YoY. All categories except tractors witnessed double digit growth with 2-wheelers, 3-wheelers and commercial vehicles retail sales surging by 12 per cent, 69 per cent and 10 per cent respectively. Tractors, however, only grew by 4 per cent.
Manish Raj Singhania, FADA President, attributes the PV retail performance to better supplies coupled with better sales, though at the upper end of the spectrum. “This kept the meter ticking.
This apart from 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,” says Singhania. Although the 2-wheeler segment demonstrated yoy growth, it remains significantly below pre-pandemic levels, which says Singhania, indicates that rural India is still bearing the burden of high inflationary costs.
“The 3-wheeler segment achieved record-high retail sales, surpassing the previous high figures of March 2020, which was a month when the industry made the transition from BS-4 to BS-6,” the FADA president pointed out.
The retail uptick in March 2023 underscores financial year 2022-23 as the first full year without any impact of COVID. Total retail during FY23 witnessed a double-digit growth of 21 per cent. Here also, all categories, except tractors saw a double-digit growth with 2-wheelers growing by 19 per cent, 3-wheelers by 84 per cent and commercial vehicles growing by 33 per cent. Tractors, however, only grew by 8 per cent.
Retail sales of PVs reached a record high of 3.6 million vehicles, growing 23 per cent 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,” says Singhania.
While the demand for higher-end variants helped sustain sales, the entry-level variant remains under pressure as customers in this category are still affected by high inflation.
The 2-wheeler category fell to 7 years low with total retails of 15.9 million. The 3-wheeler category continued to grow at a healthy pace and was back to pre-Covid levels of FY19. On the other hand, tractors showed the least growth and clocked all time high retails of 8.27 lakh beating its previous high of 7.82 lakh in FY’21.
However, there is cause for worry for the auto industry as the end of a high growth period signals a fiscal year of tapered growth of low single digit due to high inflationary pressure coupled with routine price hikes and regulatory changes.
The US Government agencies have, for a third successive month, reiterated the possibility of El Niño’s arrival later this year. This may result in poor monsoon, thus hampering rural India’s growth potential.