Total vehicle retails dip 4% in April; 2-wheelers continue to struggle: FADA

The FADA has asked the GST Council to consider reducing the GST on two-wheelers from 28% to 18%, to help its revival, as it represents 75% of total auto sales volume.

The rural economy has yet to show significant progress. Two-wheeler sales are still down 19% in comparison to the pre-pandemic month of April 2019.

“The Passenger Vehicle segment, which achieved record sales in FY23, slowed down in April, with retails decreasing by 1% YoY. This was primarily due to last year’s high base and the OBD 2A norms, which led to vehicle price increases and advanced purchases in March,” said Manish Raj Singhania, President, FADA in a statement.

PVs showed a decline in year-on-year growth for the first time in eight months. FADA said that in this segment, rising inventories are a concern.

“Entry-level PVs have fewer buyers, suggesting that customers at the bottom of the pyramid are still hesitant to upgrade from 2-wheelers to 4-wheelers,” he added.Unfavourable weather conditions in April, including untimely rains and hailstorms, cause crop damage in several states, exacerbating farmer concerns and potentially impacting entry-level 2-wheeler and passenger car sales, FADA opined.Owing to these factors, FADA has maintained a cautious stance for the month of May.

Retails of three-wheelers increased by 57% owing to high demand for e-rickshaws and passenger segments, while tractors and commercial vehicles (CVs) grew by 1% and 2% respectively.

” (CV) dealers reported that vehicle availability was a major concern due to the OBD 2A norms. The low base from last year also contributed to the positive growth,” Singhania said.

It expects the upcoming marriage in May to bring about a sales resurgence for two-wheelers, driven by an increase in customer inquiries.