Passenger vehicle retail sales in India rose 27 per cent year-on-year to 22,06,070 units in April as all segments, including passenger vehicles and two-wheelers, witnessed growth, industry body FADA said on Wednesday.

The overall number of vehicle registrations stood at 17,40,649 units in April 2023.

Passenger vehicle retail sales rose 16 per cent to 3,35,123 units last month as compared to 2,89,056 units in the same month last year.

Similarly, two-wheeler registrations increased 33 per cent to 16,43,510 units in April, up from 12,33,763 units in the same month last year.

Commercial vehicle retail witnessed a 2 per cent year-on-year jump to 90,707 units in April.

Three-wheeler sales rose 9 per cent year-on-year to 80,105 units while tractors witnessed growth of 1 per cent at 56,625 units in April.

"While some attribute this growth to the shift in Navratri to April instead of March last year, the overall increase was significant," Federation of Automobile Dealers Associations (FADA) President Manish Raj Singhania said.

The passenger vehicle category experienced double-digit YoY growth, supported by enhanced model availability and favourable market sentiments, particularly around festive events like Navratri and Gudi Padwa, he noted.

"Despite strong bookings and customer flow, high competition, excess supply and discounting presented challenges for sustained growth. Additionally, the lack of new models in some portfolios impacted market traction," Singhania added .

The two-wheeler segment saw notable growth due to improved supply and the increasing demand for 125cc models, he said.

Positive market sentiments, bolstered by stable fuel prices, a favourable monsoon outlook, festive demand, and the marriage season, contributed to the increase in sales, Singhania said.

In the commercial vehicle segment, elections dampened sentiment, with customers delaying expansion plans, he said.

Limited financial options and regional challenges such as water scarcity further impacted performance, he added.

Singhania noted that the domestic auto industry remains cautiously optimistic about its near-term outlook. "Market opportunities exist with rising customer interest in new models. However, election-related uncertainty and financial constraints remain key challenges that the industry will need to monitor closely to navigate this evolving landscape effectively," he added.

FADA said it collated vehicle retail data from 1,360 out of 1,503 RTOs across the country.