Automobile retail sales up 14% in March; post 21% YoY growth in FY23

Automobile retail sales witnessed a 14 per cent rise in March on a year-on-year (YoY) basis, according to data from the Federation of Automobile Dealers Associations (FADA). For the full financial year 2022-23 (FY23), sales grew 21 per cent YoY.

For both the month of March and for the financial year, except for tractors, all other categories, including two-wheelers, three-wheelers, passenger vehicles, and commercial vehicles, posted double-digit growth.  

In March, two-wheelers, three-wheelers, passenger vehicles and commercial vehicles saw a growth of 12 per cent, 69 per cent, 14 per cent, and 10 per cent, respectively. Tractors, however, only grew by 4 per cent. Though two-wheeler numbers rose in March, they were still down by 9 per cent compared to pre-Covid levels in FY20.

“Better supplies coupled with better sales, though at the upper end of the spectrum kept the meter ticking. This apart from the increase in prices of OBD 2A (on-board diagnostics) vehicles coupled with multiple festivals in the month kept the sales healthy though inquiry levels,” Manish Raj Singhania, president of FADA, said about the growth in the passenger vehicle segment in March.

“Financial year 2022-23 was the first full year without any impact of Covid after a gap of two years. Consequently, overall retail sales during the year experienced double-digit growth of 21 per cent. Similarly, all categories except for tractors saw double-digit growth, with two-wheelers, three-wheelers, passenger vehicles, and commercial vehicles growing by 19 per cent, 84 per cent, 23 per cent, and 33 per cent, respectively. Tractors, however, only grew by 8 per cent,” Singhania said about the financial year numbers.

The 3-wheeler category maintained its impressive growth rate of 84 per cent YoY. Electrification in this category reached 52 per cent, 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.

Retail sales of passenger vehicles reached a record high of 3.6 million vehicles, growing 23 per cent YoY. The previous high was in 2018-19, 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,” he said

Though tractors registered single-digit growth of 8 per cent, this segment clocked an all-time high retail sales of 827,000 beating its previous high of 782,000 units in FY21.