FADA data suggests that footfall at car showrooms could have been affected by the May heatwave while purchase decisions may have been delayed due to e
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After a prolonged period of happy cheers in the Indian car market, May concluded as a month where there was comparatively less to smile about for manufacturers in the world’s third-largest vehicle market. As per data released on Monday by Federation of Automobile Dealers Association (FADA), the passenger-vehicle segment de-grew by a marginal yet significant one per cent last month when compared to retail figures from May of 2023.
While the overall vehicle market saw an uptick of 2.61 per cent last month, powered primarily by performance of the two-wheeler (2.5 per cent) and three-wheeler (20 per cent) segments, the going wasn’t quite as easy for car manufacturers. This despite the fact that there was a better supply of units last month when compared to the same month of last year. Manish Raj Singhania, FADA President, informed through an official press release that the tumble wasn’t entirely unexpected. “The lack of new models, intense competition and poor marketing efforts by OEMs affected sales,” he said. Additionally, increased customer postponements and low enquiries further contributed to the challenging market conditions.”
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FADA also notes that heatwave conditions across most parts of northern India through the entire course of May could have resulted in lower footfall at car showrooms. Also, election-related uncertainties may have led many potential customers to delay their purchase decisions despite various discount offer being unveiled by many manufacturers.
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Indian automobile market: The path ahead
FADA highlights that the near-term outlook for overall automobile retail in the country is ‘cautiously optimistic’ with positive as well as challenging factors at play across various segments. Among the positives, FADA counts post-election phase to usher in a sense of stability that would help auto retail while improving market sentiments. That the India Meteorological Department (IMD) has predicted an above-normal rainfall during the monsoon season also augers well, especially for rural demand.
But challenging factors like lack of new models and ‘poor marketing’ efforts from brands are also a concern. FADA further notes that extreme weather conditions like continuing heatwave and possibility of incessant rainfall in other parts could dampen buying spirits and sentiments.
First Published Date: 10 Jun 2024, 09:44 AM IST