As the high-growth period has passed, FY24 is expected to see tapered growth in the low single digits due to a high base, inflationary pressures, routine price hikes, and regulatory changes, Federation of Automobile Dealers Associations (FADA) said on Tuesday.

“Additionally, for the third consecutive month, US Government agencies have warned of the possibility of El Niño’s arrival later this year, which could lead to poor monsoons, hampering rural India’s growth potential. The untimely rains and hailstorms in North and Central India have destroyed key Rabi crops and delayed harvesting, which will have a negative impact on rural sales,” Manish Raj Singhania, President, FADA, said.

The year will also witness high electric vehicle penetration, which will eat into ICE market share, he said.

Segment-wise breakdown

Sharing the monthly and annual retail sales data, Singhania also said while the two-wheeler segment demonstrated year-on-year (YoY) growth, it remains significantly below pre-pandemic levels, indicating that rural India is still bearing the burden of high inflationary costs.

Two-wheeler sales grew by more than 12 per cent YoY to 14,45,867 units during March as compared with 12,86,109 units in the corresponding month last year. In annual sales, it grew by more than 18 per cent to 1,59,95,968 units during FY23 as against 1,34,94,214 units in the previous fiscal.

Similarly, passenger vehicle (PV) retail sales grew by more than 14 per cent during March to 3,35,266 units compared with 2,93,016 in the same month last year. In FY23, the PV sales grew by 23 per cent to 36,20,039 units as against 29,42,273 units in FY22, the FADA report said.

Also read: Auto component sector to grow by 5-8% in FY’24 on increased domestic demand

The three-wheeler segment achieved record-high retail sales by 69 per cent YoY to 86,857 units in March as compared with 51,483 units in the corresponding month last year. On fiscal year comparison, the three-wheeler sales grew by 84 per cent YoY to 7,67,071 units as compared with 4,17,108 units in the April-March period.

In the commercial vehicle (CV) segment, the retail sales grew by 10 per cent YoY in March to 92,790 units as against 84,124 units in March 2022. On annual basis, the CV retail sales grew by 33 per cent YoY to 9,39,741 units as compared with 7,07,186 units in the previous financial year.

However, tractor sales grew by a lower single digit (4 per cent) to 81,067 units during last month as compared with 78,070 units in March last year. On annual basis also, tractor sales grew by only 8 per cent to 8,27,403 units last fiscal as compared with 7,66,545 units in FY22.

Double-digit growth

“FY23 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 (2,21,50,222 units against 1,83,27,326 units).

Similarly, all categories except for tractors saw double-digit growth,” Singhania added.

On a monthly basis, the retail sales of all categories grew by 14 per cent YoY to 20,41,847 units in March as compared with 17,92,802 units in March 2022.