 "High on SUVs: India records all-time high passenger vehicle sales in FY24")
With a total of 3,948,143 units sold, 8.45 per cent higher than the 3,640,399 units in the financial year 2023 (FY23), the passenger vehicles (PV) retail sales touched an all-time high in FY24, according to the data released by the Federation of Automobile Dealers Associations (Fada).
It noted that the PV retail sales witnessed a milestone year due to improved vehicle availability, a compelling model mix, and the launch of new models. The association added that the sales also rose due to enhanced supply dynamics, strategic marketing efforts, and expansion in road infrastructure.
The year also witnessed high demand for sports utility vehicles (SUVs). Fada said that for the first time in India, SUVs now hold a market share of 50 per cent.
In March, however, the PV sales dipped by 6 per cent compared to March 2023 due to heavy discounting and selective financing. It was further impacted by economic worries and the electoral climate. A total of 322,345 PVs were sold in the month compared to 343,527 units last year.
Compared to 330,107 units in February 2024, the PV sales were down by 2.35 per cent.
Overall, auto retail sales in India increased by 10.29 per cent in FY24. A total of 24,530,334 units were sold, including PVs, commercial vehicles, two-wheelers, three-wheelers, and tractors, compared to 22,241,361 units in FY23.
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The highest increase in sales was witnessed in three-wheelers, which saw a jump of 48.83 per cent. It was followed by two-wheelers (9.3 per cent) and PVs.
According to Fada President Manish Raj Singhania, three-wheeler sales were fuelled by the introduction of cost-effective compressed natural gas fuel options and new electric models, alongside strong market sentiment and the integration of high-quality after-sales service.
For two-wheelers, sales increased due to enhanced model availability, new product introduction, and positive market sentiment. It was further helped by special schemes and the rural market's recovery after the Covid-19 pandemic.
Commercial vehicles saw the lowest growth of 4.82 per cent in retail sales during the year.
In March, total auto sales jumped by a modest 3.14 per cent at 2,127,177 units compared to 2,062,409 units last year. Three-wheelers and two-wheelers witnessed growth of 17.13 per cent and 5.44 per cent, respectively.
However, all other categories, PVs, commercial vehicles (CVs), and tractors, saw their sales shrink during the month. CV sales were down by 5.87 per cent, and tractor sales dropped by 3.33 per cent.
The month was, however, positive for electric two-wheelers.
"The expiration of the FAME-II subsidy on March 31 led to a notable increase in electric vehicle sales, with the two-wheeler electric vehicle (2W-EV) market share jumping to 9.12 per cent for the first time," the association said.
In the near term, auto sales in India may continue to be impacted owing to a decline in consumer sentiment among urban buyers coupled with forthcoming elections.
In the long term, the market is "cautiously optimistic."
"Market sentiment is cautiously optimistic, with the industry banking on improved customer engagement and financing schemes to boost sales," Fada said.
"However, it faces challenges like the high base in the PV segment and intense competition. The focus is on overcoming these hurdles with innovation and strategic market engagement, aiming for balanced growth across all segments."