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FADA Highlights Dip In Car Sales Amid Market Growth: 1% Decline In Witnessed
May saw a dip in the Indian car market, with a one per cent decline in the passenger-vehicle segment, according to the Federation of Automobile Dealers Association (FADA). This marked a contrast to the overall vehicle market, which saw a 2.61 per cent rise, driven by a 2.5 per cent increase in two-wheelers and a 20 per cent surge in three-wheelers.
FADA President Manish Raj Singhania cited several reasons for the decline in car sales. "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.
Impact Of Heatwave & Elections
Heatwave conditions across northern India in May possibly led to reduced footfall at car showrooms. Election-related uncertainties also may have caused potential buyers to delay their purchase decisions, despite various discounts offered by manufacturers.
Market Outlook
FADA describes the near-term outlook for the automobile retail market as 'cautiously optimistic’. Post-election stability is expected to improve market sentiments. Moreover, an above-normal rainfall prediction by the India Meteorological Department (IMD) could boost rural demand.
DriveSpark Thinks
Though May month saw a dip in sales, we expect the automotive market to pick up pace in a few months. This recent dip in sales could be due to lack of new models and poor marketing efforts from brands. Also, extreme weather conditions, such as continuing heatwaves and potential incessant rainfall, could also dampen buying spirits.
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