FADA releases March’23 & FY’23 Vehicle Retail Data

New Delhi April 4, 2023: The Federation of Automobile Dealers Associations (FADA) today released Vehicle Retail Data for March’23 & FY’23 the witnessed double digit digit growth YOY across most of the categories.

In March 2023, total vehicle retail experienced a 14% YoY increase. Except for tractors, all categories saw double-digit growth, with 2-wheelers, 3-wheelers, passenger vehicles and commercial vehicles growing by 12%, 69%, 14%, and 10%, respectively. Tractors, however, only grew by 4%. Although the 2-wheeler segment demonstrated YoY growth, it remains significantly below pre-pandemic levels, indicating that rural India is still bearing the burden of high inflationary costs.

The 3-wheeler segment achieved record-high retail sales, surpassing the previoushigh figures of March 2020, which was a month when the industry made the transition from BS-4 to BS-6.  The Passenger Vehicle segment maintained its upward trend, growing by 14%. As previously stated in our last press release, festivals, along with the transition to OBD-2A norms, played a crucial role in sustaining the sales momentum. US Government agencies have, for a third successive month, reiterated the possibility of El Niño’s arrival later this year. This may result in poor monsoon thus hampering rural India’s growth potential.

BRIEF ANALYSIS OF FY 2023

FY’23 was the first full year without any impact of Covid.

• Total retail during the year witnessed a double-digit growth of 21%. Here also, all

categories, except tractors saw a double-digit growth with 2-wheelers, 3-wheelers,

passenger vehicles and commercial vehicles growing by 19%, 84%, 23% and 33%

respectively. Tractors, however, only grew by 8%.

• The 2-wheeler category fell to 7 years low with total retails of 15.9 Mn.

• The 3-wheeler category continued to grow at a healthy pace and was back to precovid

levels of FY19.

• PV sales hit a record high by retailing 3.6 Mn vehicles. The previous high was in FY’19

when retails were 3.2 Mn vehicles.

• Tractors, though showed the least growth, clocked all time high retails of 8.27 Lakhs

beating its previous high of 7.82 Lakhs in FY’21.

• With high growth period now over, FY’24 will witness a tapered growth of low single

digit due to high inflationary pressure coupled with routine price hikes and regulatory

changes.

March’23 Retails

Commenting on how March’23 performed, FADA President, Mr. Manish Raj Singhania said, “March’23 continued to witness double digit growth of 14% YoY. All categories except Tractors witnessed double digit growth. 2-wheelers, 3-wheelers, passenger vehicles and commercial vehicles saw a growth of 12%, 69%, 14%, and 10%, respectively. Tractors, however, only grew by 4%.

The 2-Wheeler category witnessed a growth of 12% YoY but was down by -9% from its pre-covid levels. Rural India which still has not performed continues to remain under inflationary pressure.

The 3-wheeler segment achieved record-high retail sales by growing 69% and surpassing the previous high figures of March 2020, which was a month when the industry made the transition from BS-4 to BS-6. The Passenger Vehicle segment saw a growth of 14% YoY. Better supplies coupled with better sales, though at the upper end of the spectrum kept the meter ticking. This apart from increase in prices of OBD 2A vehicles coupled with multiple festivals in the month kept the sales healthy though inquiry levels have now started decreasing. The Commercial Vehicle category has also shown robust growth by growing 10% YoY. Passenger vehicle demand was also healthy during the month Apart from the infra spending by Central Government, OBD Stage 2A price hike coupled with discount offers from OEMs witnessed pre-buying.”

FY’23 Retails

Commenting on how FY’23 performed, FADA President, Mr. Manish Raj Singhania said, “FY’23 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%. Similarly, all categories except for tractors saw double-digit growth, with 2-wheelers, 3-wheelers, passenger vehicles, and commercial vehicles growing by 19%, 84%, 23%, and 33%, respectively. Tractors, however, only grew by 8%.

The 2W segment fell to 7 years low with total retails of 15.9 Mn during the year. EV penetration in this category during the year was at 4.5%. The 3-wheeler category maintained its impressive growth rate of 84% year over year. Electrification in this category reached 52%, primarily driven by the e-rickshaw segment. The availability of finance, along with the availability of alternative fuels and state subsidies, has contributed to the growth of this segment.

Retail sales of passenger vehicles reached a record high of 3.6 million vehicles, growing 23% YoY. The previous high was in FY’19 when retail sales were 3.2 million vehicles. The segment experienced numerous new launches and better product availability due to the easing of the semiconductor shortage during the year. The demand for higher-end variants helped sustain sales. However, the entry-levelvariant remains under pressure as customers in this category are still affected by high inflation. Tractors registered single digit growth of 8% YoY. In spite of this, this segment clocked all time highretails of 8.27 Lakhs beating its previous high of 7.82 Lakh units in FY’21.”

Near Term Outlook

As the high-growth period has now passed, FY’24 is expected to see tapered growth in the low single digits due to a high base, inflationary pressures, routine price hikes, and regulatory changes. 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. The year will also witness high EV penetration which will eat into ICE market share.

Overall, FY’24 will be a year of consolidation for the India Auto Retail Industry with an overall single digit growth over previous year.

ALL INDIA VEHICLE RETAIL DATA FOR MARCH 2023

ALL INDIA VEHICLE RETAIL DATA FOR FY 2023