India buys over 30% fewer vehicles in Dec, FADA pins hope on historically best Q4
FADA is hopeful of recovery in the January to March 2024 quarter, which the dealer association body's president Manish Raj Singhania pointed out is historically the best quarter for the auto industry.
India’s auto sales dipped by over 30% to 19.9 lakh in December 2023 when compared to 28.54 lakh in November, according to auto sales data released by the Federation of Automobile Dealers Associations of India (FADA) on January 8.
However, the dealers’ body is hopeful of recovery in the January to March 2024 quarter, which FADA president Manish Raj Singhania pointed out is historically the best quarter for the auto industry.
“The fourth quarter is one of the brightest quarters for the auto industry. So overall if the supplies are good, and with new model launches coming up in both two-wheeler as well as the passenger vehicle spaces, and continued excitement in the SUV segment, we are looking at a positive growth of single digits across various segments. And PV as well as two-wheelers will continue to perform well in the last quarter of this financial year,” the FADA president told CNBC-TV18.
Singhania’s remarks come as December auto sales declined by more than 35% compared to the previous month, three-wheelers slipped about 4.5%, while passenger vehicle sales dipped by 18%, commercial vehicles by 12% only tractor sales grew by 27%.
However, on a year-on-year basis, i.e. in comparison to December 2022, two-wheelers sales rose 27%, three-wheelers saw an uptick of 36% while passenger vehicle sales grew by only 2.65%, as per FADA data.
Meanwhile, as December also marked the end of calendar year (CY) 2023, data shows an 11% increase in total vehicle sales compared to CY 2022.
In the two-wheeler segment, while Hero Motocorp's market share rose to 32% in December 2023, Honda Motorcycles share dropped nearly two percentage points (YoY) to 23%. TVS Motor and Bajaj Auto, on the other hand, held a share of 16% and 12.5%, respectively.
In the passenger vehicles segment, Maruti Suzuki continued to retain the top spot though its share reduced marginally to 40.3%. Tata Motors registered a market share of 15% in December 2023 while Hyundai Motor and Mahindra and Mahindra saw a share of 13.5% and 10.7%, respectively, according to FADA data.
Going forward, the dealer’s association expects PVs to see growth with new product launches and stable market sentiments. “The market is hopeful about improved vehicle availability and demand driven by new models with many OEMs launching their EVs. However, caution should be exercised regarding excess inventory as well as the need to match production with actual market demand,” FADA said in its monthly report.
The two-wheeler segment, meanwhile, is expected to see a boost from new model launches, especially in the first half of the year, and an overall better economic condition coupled with higher EV participation. Improved customer sentiments, due to factors like lower fuel prices and crop payments to farmers, are likely to drive demand.
Singhania, in an interview with CNBC-TV18, said, “Till August, the two-wheeler industry had been struggling. We were not able to get the requisite retail and were degrowing with the primary contribution from the rural market. Rural was lagging and 70% of the two-wheeler sales come from the rural market because predominantly two-wheeler retail is dominated by the bike segment.”
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