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Business Standard
2 days ago
- Automotive
- Business Standard
Auto retail sales rise 5% in May; PVs hit hard by border tensions
Automobile retail sales in India posted a modest 5 per cent year-on-year growth in May, led by two-wheeler, three-wheeler, and tractor sales growth triggered by the auspicious marriage season, a strong Rabi harvest, and pre-monsoon demand in rural markets, said monthly data by the Federation of Automobile Dealers Associations (Fada) on Friday. However, passenger vehicle (PV) sales dipped 3 per cent to 302,214 units due to heightened war-related tensions. Border tensions in regions like Jammu & Kashmir, Punjab, Rajasthan, and Gujarat further prompted buyers to delay purchases. Entry-level models were hardest hit, as constrained financing and subdued consumer sentiment compounded the slowdown. During the month under review, the construction equipment segment witnessed a 6.3 per cent dip, and commercial vehicles (CVs) declined by 3.7 per cent. Fada estimates that global supply‐chain headwinds — from rare‐earth constraints in electric vehicle components to ongoing geopolitical tensions — may keep urban consumer sentiment in check in June. The segments that performed well include two-wheelers, which rose 7.3 per cent, three-wheelers with a 6.2 per cent increase, and tractors, which posted a rise of 2.7 per cent. 'In the 2W category, retail volumes fell 2.02 per cent month-on-month but still posted a robust 7.31 per cent year-on-year increase. Dealers attribute this resilience to a higher number of auspicious marriage days, a strong Rabi harvest, and pre-monsoon demand — especially in semi-urban and rural markets. That said, financing constraints in the economy segment capped full upside potential. Looking ahead, stakeholders should continue to monitor liquidity access and model availability to preserve momentum,' said C. S. Vigneshwar, President, Fada. Passenger vehicle retails contracted by 13.6 per cent month-on-month and 3.1 per cent year-on-year, while inventory days — which had hovered around 50 — have edged up to approximately 52–53 days. 'Although bookings remained fairly healthy, retail conversions lagged on margin-money challenges and deferred decisions. OEMs must adopt a cautious, ground-reality-aligned approach to production planning and channel incentives so that dealers are not burdened by rising carrying costs or forced into excessive discounting,' he added. Among the top five players, Maruti Suzuki witnessed a dip of 5 per cent to 1,16,899 units, Hyundai Motor around 16 per cent, and Tata Motors around 13 per cent decline in sales. However, Mahindra & Mahindra, which stormed to the number two place in recent times backed by its new launches, gained by 26 per cent during the month. Commercial vehicle retails declined by 11.25 per cent month-on-month and 3.71 per cent year-on-year amid muted freight cycles, tight liquidity, and adverse geopolitical sentiment. While bus sales offered some relief, passenger carriers and commodity-linked segments (cement, coal) saw sharp de-growth due to delayed financing and softening total industry volume (TIV). Wholesales, however, accelerated as OEMs and dealers built inventory ahead of the June 2025 mandatory air-conditioned driver-cabin regulation. The industry body predicts cautious optimism in its demand outlook for June. 'Monsoon‐driven rural traction and festival pull‐through should sustain 2W activity, yet persistent financing constraints and selective OEM price adjustments may temper incremental gains. PV dealers report elevated inventory days and legacy product portfolios, limiting retail conversions despite localised Rath Yatra uplifts. In the CV segment, inventory churn remains elevated as OEMs and dealers pre‐empt June '25 A/C‐cabin regulations, while freight demand in coal, cement, and mining continues to be muted by liquidity bottlenecks and early rains,' Vigneshwar added.
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Business Standard
05-05-2025
- Automotive
- Business Standard
Auto retail sales rise 3% in April after two months of decline: Fada
Automobile retail sales witnessed a 3 per cent rise to 2.28 million units in April this year, up from 2.22 million units in April 2024. This came on the back of rising demand due to festivals across states, according to a report by the Federation of Automotive Dealers Associations (FADA) released on Monday. All categories, except commercial vehicles (CV), closed in the green, with two-wheelers, three-wheelers, passenger vehicles, and tractors up 2.25 per cent, 24.5 per cent, 1.5 per cent, and 7.5 per cent, respectively. However, CVs saw a 1.05 per cent year-on-year decline following OEM-led price increases against stagnant freight rates and fleet utilisation. This comes after overall automobile retail sales declined for the second consecutive month (0.7 per cent) in March. The fall was attributed to a 2 per cent slide in two-wheeler sales, a 6 per cent drop in three-wheeler sales, and a 6 per cent decline in tractor sales. Dealers indicate that advance purchases in March resulted in elevated carryover stocks, while holiday calendars dampened fresh enquiries and delayed conversions — particularly in the small commercial vehicle (SCV) cargo category, where price and product gaps have weighed heavily. "In addition to the festivals, pause on the tariff war and sharp pullback by stock markets also helped in the recovery of sales in April," said C. S. Vigneshwar, president, FADA. In the PV segment, Maruti Suzuki led the surge with 138,021 units with a 39.4 per cent market share. On the other hand, Mahindra & Mahindra came in second (14 per cent), followed by Tata Motors (13 per cent), and Hyundai Motor (12.5 per cent). 'This reflects a discount-led market and elevated inventories—approximately a 50-day supply—amid cautious consumer sentiment that tempered enquiry-to-sale conversions,' he said. "Sustained SUV demand underpinned volumes even as entry-level customers remained cautious, underscoring the need for OEMs to recalibrate production and reduce stock levels to mitigate deeper discounts and carrying costs at dealerships," he added. The rise in two-wheelers was attributed to buoyant enquiry growth in rural areas post-Rabi harvest, driven by strong crop yields, healthy reservoir levels, and a favourable monsoon outlook, while wedding-season tailwinds sustained rural offtake. FADA expects improved numbers going ahead, as May's agricultural cycle is concluding on a strong note. 'The IMD's forecast of an above-normal southwest monsoon bodes well for rural incomes, farm-sector growth, and downstream demand, while a well-distributed rainy season is critical to containing food inflation. At the same time, Kantar's Rural Barometer and GroupM data signal heightened consumer selectivity in rural India—household spending has outpaced income growth, and inflationary pressures are tempering discretionary purchases,' Vigneshwar said.
Times of Oman
05-05-2025
- Automotive
- Times of Oman
India: FADA reports 3% growth in April 2025 vehicle sales
New Delhi: The Federation of Automobile Dealers Associations (FADA) reported a 3 per cent rise in retail vehicle sales for April 2025, compared to the same month last year. FADA attributed increase in sales across all categories except commercial vehicles, according to its monthly vehicle retail sales data released on Monday. FADA President C. S. Vigneshwar attributed April sales to pull back in market and pause in tariff by US. "With the tariff war paused, stock markets staged a sharp pullback--alleviating investor concerns--and customers thus leveraged Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi and Vishu to complete purchases, helping April end on a positive note," According to the report, the three-wheeler segment saw the highest growth of nearly 25 per cent compared to April 2024, followed by the tractor segment, which recorded a 7.5 per cent year-on-year increase. On the other hand, commercial vehicles (CV) saw a minor (year-on-year) decline of 1 per cent and a more than 4 per cent month-on-month drop, weighed down by OEM price hikes and flat freight demand. It was the only segment that witnessed a decline for April 2025. On contrary in CV segment "the bus segment exhibited resilience, underpinned by strong school-transport and staff-mobility demand." said FADA release. The two-wheeler segment posted a rise of about 12 per cent, driven by strong rural demand. "Dealers reported buoyant enquiry growth in rural areas post-Rabi harvest, driven by strong crop yields, healthy reservoir levels and a favourable monsoon outlook, while wedding-season tailwinds sustained rural offtake," Vigneshwar said, referring to two-wheeler sales. Passenger vehicle sales saw a modest 1.6 per cent increase, with strong SUV demand offset by sluggish sales in the entry-level segment. FADA says the outlook for May 2025, looks bright as agriculture output is expected to be good. "May's agricultural cycle is concluding on a strong note, underpinned by healthy crop prices and robust mandi procurement," FADA said in the release. It added, "at the same time, Kantar's Rural Barometer and GroupM data signal heightened consumer selectivity in rural India--household spending has outpaced income growth, and inflationary pressures are tempering discretionary purchases."
