Auto Retail Sales Rise Three Percent After Two Months of Decline
Due to higher demand during Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi, and Vishu, automobile retail sales increased by three percent in April, reaching 2.28 million units, up from 2.22 million units in April 2024, according to a report by the Federation of Automotive Dealers Associations (Fada).
With two-wheelers, three-wheelers, passenger cars, and tractors up 2.25 percent, 24.5 percent, 1.5 percent, and 7.5 percent, respectively, all categories except commercial vehicles (CVs) closed in the green. However, due to OEM-led price hikes and stagnant freight rates and fleet utilization, the commercial vehicles segment saw a 1.05 percent year-over-year decline.
This follows a two-month decline in two-wheeler sales, a six-percent decline in three-wheeler sales, and a six-percent decline in tractor sales, which caused overall automotive retail sales to fall for the second consecutive month, down 0.7 percent in March.
Dealers reported that March advance orders led to higher carryover inventory, and holiday schedules slowed new inquiries and conversions — especially in the small commercial vehicle (SCV) cargo market, where price and component shortages have been major issues.
“In addition to the festive impact, the pause on the tariff war and sharp pullback by stock markets, alleviating investor concerns, also helped in the recovery of sales in April,” said C. S. Vigneshwar, president of Fada.
Maruti Suzuki spearheaded the increase in the passenger car market with 1,38,021 units and a 39.4 percent market share. The competition among Mahindra & Mahindra (14 percent), Tata Motors (13 percent), and Hyundai Motor (12.5 percent) for the second position grew more fierce.
“This performance in PV 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.
Strong crop yields, stable reservoir levels, and a favorable monsoon outlook drove the post-Rabi harvest buoyant inquiry growth in rural areas, which in turn drove the increase in two-wheeler sales in April. Meanwhile, wedding-season tailwinds maintained rural offtake.
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As May's agricultural cycle comes to a successful end, supported by strong mandi procurement and solid crop prices, Fada anticipates better figures in the future.