Multiple festivals like Holi, Ugadi, Gudi Padwa, and Navratri in the coming days will help push auto sales, the Federation of Automobile Dealers Associations (FADA) said on Monday.

“Apart from this, better availability of vehicles, last month of the financial year, change in on-board diagnostics (OBD) norms from April, which will increase vehicle prices, the industry may see schemes being rolled out by original equipment manufacturers (OEMs), thus aiding higher sales,” Manish Raj Singhania, President, FADA said.

On the flipside, India’s chief economic advisor said that urban demand recovery is taking place at a faster pace than rural. This, along with a sharp slowdown in private consumption expenditure to a two-year low, suggests a softening in household spending demand amid inflationary pressure as post-Covid pent-up demand starts to fade, he further said while sharing the monthly retail sales numbers.

Also read: No GDP slowdown; ‘shallower’ recovery prognosis compares apples to oranges: CEA

“Apart from this, the Finance Ministry has released a statement that the predictions of a return of El Niño conditions in the Pacific could presage a weaker monsoon in India, resulting in lower output and higher prices. This will act as a dampener for auto sales,” he said.

Therefore, “while the month of March looks good for auto sales, on a medium-term outlook, FADA remains cautious till the time a better monsoon forecast is not announced by IMD,” he added.

Also read: El Nino threat and heat wave effect loom large

Yearly sales report

According to FADA, the passenger vehicle (PV) retail sales grew by 11 per cent year-on-year (YoY) to 2,87,182 units in February as compared with 2,58,736 units in the corresponding month last year.

Similarly, the two-wheeler category witnessed a growth of 15 per cent YoY to 12,67,233 units during the month as against 11,04,309 sales in February 2022.

Also read: Two-wheeler sales in 2022, worst in a decade

Commercial vehicle retail sales grew 17 per cent YoY to 79,027 units last month as compared with 67,391 units in the same month last year.

Three-wheeler sales grew the most by 81 per cent YoY to 72,994 units in February as against 40,224 units in the corresponding month last year.

“This category has seen drastic growth due to Central and State government’s subsidies along with good scheme promotion done by the States. Along with this, aggressive finance schemes continues to aid growth for this category,” Singhania said.

Overall, February continued to witness double-digit growth of 16 per cent YoY to 17,75,424 units across categories as compared with 15,31,196 units in February last year.

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