Increase in Auto Sales by 16% YoY in India in February 2023 Powered by Weddings and Diagnostic Modifications

Despite the ongoing impact of the Covid-19 pandemic, the Indian automobile industry has seen positive growth in various categories of vehicles. According to the Federation of Automobile Dealers Associations (FADA), all segments of automobiles have experienced double-digit year-on-year (YoY) growth, with two-wheelers, three-wheelers, passenger vehicles, tractors, and commercial vehicles growing by 15%, 81%, 11%, 14%, and 17%, respectively.

The two-wheeler segment has witnessed a 15% YoY growth, but sales remained 14% lower than the pre-Covid month of February 2020. The change in On-Board Diagnostics (OBD) regulations and the wedding season were cited as the key factors contributing to the sustained sales, despite high inflation and a lack of positive consumer sentiment.

The three-wheeler segment experienced significant growth of 81% YoY and grew by 3% compared to February 2020, mainly due to the subsidies provided by both the central and state governments, effective promotional schemes, and aggressive financing schemes. The passenger vehicle segment also grew by 11% YoY and 16% compared to February 2020, attributed to the launch of new models, consistent improvement in supply, favorable booking-to-cancellation ratio, and increased demand from wedding events.

The commercial vehicle category exhibited a sturdy growth of 17% in the current period, attributed to the upcoming price hikes due to changes in OBD norms and the government’s increased investment in infrastructure. Despite the positive trends, sales figures for February 2023 remained 8% lower than those for February 2020, prior to the pandemic.

The Indian automobile industry consortium has issued a proclamation that the upcoming month of March, which encompasses a multitude of festivals, is anticipated to provide a fillip to auto vending. The industry might observe original equipment manufacturers (OEMs) rolling out strategies to bolster escalated sales, with the transformation in OBD norms from April that will culminate in augmented automobile prices. The typical stockpile for passenger vehicles ranged from 35 to 37 days, while for two-wheelers, it was 20 to 25 days.

In terms of market share, Hero Motocorp experienced a slight decrease in market share in the two-wheeler segment, while Honda Motorcycle and TVS Motor saw a minor increase during the same period. Bajaj Auto increased its market share in the three-wheeler segment, and Tata Motors, the leader in the commercial vehicles segment, saw its market share decline. Mahindra and Mahindra, with 23.85%, and Ashok Leyland, with 16.87%, were among the top three in terms of market share. Maruti Suzuki, the market leader in passenger vehicles, experienced a slight decrease in its share from 42.36% last year to 41.4% this year.

The positive trends in the automotive industry can be attributed to various factors, such as improved market conditions, favorable government policies, and the launch of new and innovative models. However, the industry is still recovering from the impact of the pandemic, with sales figures lower than the pre-Covid levels. With festivals coming up and the transformation in OBD norms, the industry is optimistic about future growth.

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