According to the Federation of Automobile Dealers Associations (FADA), retail sales of vehicles in India increased by 16% to approximately 1.8 million units in February 2023, driven by strong demand during the wedding season. The sales of two-wheelers rose by 15%, while those of three-wheelers, passenger vehicles, tractors, and commercial vehicles increased by 81%, 11%, 14%, and 17%, respectively. The industry body stated that the festival season could further increase sales in March 2023. The pickup in sales over the last two months was supported by chip shortages easing and automakers launching new models to meet demand ahead of the festival and wedding seasons. However, rising interest rates, coupled with elevated inflation, are considered to be sentiment dampeners, with overall sales remaining below pre-Covid levels.
FADA highlighted the demand in March 2023, citing several festivals such as Holi, Ugadi, and Gudi Padwa. Changes in emission norms from April 2023, which would lead to a rise in vehicle prices, and promotional offers from automakers in the final month of the fiscal year are expected to boost sales. FADA publishes retail sales data, while the Society of Indian Automobile Manufacturers (SIAM) counts vehicles sold to dealers, and releases data in the second week of the month.
Auto sales numbers are crucial as they are an essential indicator of private consumption and account for more than 50% of the weightage in calculating the country’s economic growth. The industry body cautioned that the forecast of El Niño weather conditions in the Pacific, leading to a weaker monsoon in India and resulting in lower output and higher prices, could dampen sales of commercial vehicles.
The retail sales of e-rickshaws surged by 89% in February 2023, as per FADA data. TVS Motor Company and Hero MotoCorp, two of India’s top three listed bike makers, exceeded domestic sales expectations in February 2023 as chip supply shortages eased. The three-wheeler segment continued to experience strong demand after government subsidies surpassed pre-pandemic levels for the first time in February 2023, according to FADA.
