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In this State of the Economy podcast, businessline’s S Ronendra Singh delves into the performance of the Indian automobile retail sales for May, with Manish Raj Singhania, President, FADA. The Indian auto retail sector achieved a modest 2.61 per cent year-on-year growth, with sales reaching 20,89,603 units compared to 20,36,528 units in May 2023 of the previous year. Despite the overall growth, the passenger vehicle segment saw a slight decline of around 1 per cent. On the other hand, the two-wheeler segment experienced a year-on-year growth of 2.5 per cent, selling 15,34,856 units compared to 14,97,778 units last May. Singhania starts by sharing insights on the passenger vehicle market, attributing the slight decline in May to several factors, including last year’s high sales benchmark, the heat wave reducing foot traffic, and the election season’s impact on consumer spending. He notes that inventory levels have reached an all-time high of 55-60 days, causing concerns among dealers. The Federation of Automobile Dealers Associations (FADA) is in discussions with original equipment manufacturers (OEMs) to align wholesale with retail sales to manage inventory better. As the discussion goes on, he points out that while SUVs dominate the market, there’s potential for growth in sedans and small cars, particularly with a good monsoon improving rural sentiment. The discussion also touches on the electric vehicle (EV) market, with Singhania highlighting the need for continued government subsidies to support EV adoption. He emphasises the importance of the upcoming budget in providing infrastructure push and reducing GST on entry-level vehicles to make them more affordable. Singhania concludes by saying he is optimistic about the industry’s growth prospects for the financial year, expecting single-digit growth in passenger vehicles and double-digit growth in the two-wheeler segment, contingent on favourable conditions such as a good monsoon and stable economic policies.
Host: S Ronendra Singh; Producer: Amitha Rajkumar
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About the State of the Economy podcast
India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups
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