Auto sales April: India’s April auto sales rise 27% even as election uncertainty affects consumer sentiment: FADA

The auto retail sector in India registered a growth of 27 per cent on an annual basis in April, driven by stable fuel prices and new model launches even as Lok Sabha elections dampened consumer sentiment, FADA said in a press release on Wedensday.

Retails of two-wheelers increased by 33 per cent while three-wheelers, passenger vehicles, commercial vehicles and tractors grew by 9 per cent, 16 per cent, 2 per cent each, the auto body said. The tractor segment grew by 1 per cent in April.

Auto retails in April were buoyed by a favourable market sentiment which was driven by stable fuel prices, a positive monsoon outlook, festive demand and the marriage season.

The 2W segment grew owing to improved supply and an increased demand for 125cc models. “New model launches also helped drive growth, despite some delays in supply,” said Manish Raj Singhania, President, FADA.

The PV segment grew in double-digits on a year-on-year basis thanks to ‘enhanced’ model availability and favourable market sentiments, particularly around festive events like Navratri and Gudi Padwa, FADA said.

However, the segment remains troubled by high competition, excess supply and discounting of products, which emerged as a challenge for its sustained growth. Furthermore, lack of new models in some portfolios too affected market traction.The commercial vehicle segment saw positive momentum bulk and corporate deals and school bus demand. However, the ongoing General elections dampened sentiment, as customers delayed their expansion plans. “Limited finance options and regional challenges such as water scarcity further impacted performance,” FADA said.

The industry sees several positive indicators in May, like improved supply, market sentiment and new electric models in certain segments. However, FADA says, challenges remain.

“Election uncertainty continues to affect market sentiment, delaying customer conversions and stalling purchasing decisions. Financial constraints, extreme temperatures, and overcapacity in the CV segment could slow growth, while heavy discounting in the PV segment could impact profitability,” FADA said.

The industry feels that seasonal factors like marriage dates and a lack of major festive events may also influence demand.

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