The two-wheeler segment continues to face challenges, with entry-level vehicles attracting fewer buyers. In light of this, the Federation of Automobile Dealers Associations (FADA) has urged the GST Council to consider reducing GST on two-wheelers from 28 per cent to 18 per cent to help revive this vital segment, which represents 75 per cent of total autos. sales volume.

On the other hand, the upcoming marriage season in May is expected to bring about a sales resurgence, driven by an increase in customer inquiries, Manish Raj Singhania, President, FADA, said on Thursday.

“Additionally, as electric vehicles (EVs) gain popularity, customers are increasingly considering transitioning from internal combustion engines (ICE) to EVs, which may temporarily delay purchasing decisions,” he said.

Tapering demand

Meanwhile, according to FADA’s monthly report, the two-wheeler segment has registered retail sales of 12,29,911 units in April, a decline of 7.3 per cent year-on-year (yoy) as compared with 13,26,773 units in the corresponding month. last year.

The passenger vehicle (PV) retail sales also declined by 1.35 per cent yoy to 2,82,674 units during the month as compared with 2,86,539 units in April 2022.

FADA noted that it is the first time in eight months the PV segment witnessed a yoy degrowth, potentially signaling a tapering demand.

“The PV segment, which achieved record sales in FY2023, slowed down in April… This was primarily due to last year’s high base and the on-board diagnostics (OBD) 2A norms, which led to price increases and advanced purchases in March ,”Singhania.

‘Take stock’

Therefore, FADA also urged the PV makers to recalibrate their inventory and prioritize the production and supply of products that are in high demand, ensuring a more efficient alignment between market demand and available inventory.

“Despite the ongoing chip shortages and somewhat sluggish market conditions, the marriage season in May is expected to provide a slight boost in sales for the current month,” it said.

In the commercial vehicle (CV) segment, retail sales grew by around two per cent to 85,587 units during April as compared with 83,987 units in April 2022.

Three-wheeler retail sales also rose by 57 per cent yoy to 70,928 units last month from 45,114 units in April 2022.

Tractor sales also rose by 1.48 per cent yoy to 55,835 units in April as against 55,019 units in the corresponding month last year.

On the outlook for all categories, Singhania said FADA maintains a cautious stance for May with untimely rains and hailstorms, causing crop damage in multiple states.

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