India’s automobile sales dropped 5.3% MoM in May 2024, with passenger vehicles seeing a 9.5% decline. Tractor sales surged 23.74% MoM.
India’s automobile market witnessed a significant month-on-month (MoM) decline in sales in May 2024, with the sharpest drop seen in the passenger vehicles (PV) segment. The data, released by the Federation of Automobile Dealers’ Association (FADA) on June 10, provides a detailed look into the performance of various vehicle categories.
Overall India Automobile Sales May 2024 Performance
The total retail automobile sales for May 2024 stood at 20.89 lakh units, reflecting a 5.3% decline from the 22.06 lakh units sold in April 2024. Despite this MoM decrease, there was a year-on-year (YoY) increase of 2.6% compared to the 20.36 lakh units sold in May 2023. This mixed performance indicates varying trends across different vehicle segments.
Two-Wheelers: Bulk of the Market
Two-wheelers, which constitute the largest segment of the monthly sales, saw a significant MoM decline of 6.61%, falling to 15.34 lakh units in May from 16.43 lakh units in April. However, on a YoY basis, two-wheeler sales showed a modest increase of 2.48%, up from 14.97 lakh units sold in May 2023.
Passenger Vehicles: Sharp Decline
The passenger vehicle (PV) segment experienced the most pronounced decline, with sales dropping 9.5% to 3.03 lakh units in May 2024 from 3.35 lakh units in April. The YoY comparison also showed a slight decline of 1%, down from 3.06 lakh units in May 2023. This drop in PV sales is a key indicator of consumer sentiment and economic conditions.
Commercial Vehicles: A Mixed Bag
Commercial vehicle (CV) sales recorded a MoM decline of 8.4%, with 83,059 units sold in May 2024 compared to 90,707 units in April. However, the CV segment showed a positive YoY growth of 4.07%, up from 79,807 units in May 2023. This suggests that while short-term challenges persist, the sector has underlying strength.
Tractors: A Bright Spot
In contrast to the overall trend, tractor sales surged by 23.74% MoM to 70,065 units in May 2024. This marks a significant increase from the previous month, although there was a slight YoY decline of 1.1%. The rise in tractor sales could be attributed to seasonal agricultural activities and favorable market conditions.
Near-Term Outlook
The FADA remains cautiously optimistic about the near-term outlook for the automobile industry. The association highlighted the potential boost from post-election stability and continuity in government policies, which are expected to spur infrastructure projects and economic activities.
“Above-normal rains forecasted by the India Meteorological Department (IMD) should enhance rural demand and support economic activities,” FADA stated in its report. However, the industry body also pointed out the challenges of extreme weather conditions, intense market competition, and liquidity issues that need to be addressed for sustained market improvement.
Conclusion
The decline in India’s automobile sales in May 2024 underscores the dynamic and multifaceted nature of the market. While some segments like two-wheelers and passenger vehicles faced significant drops, others such as commercial vehicles and tractors showed resilience and growth. The industry’s cautious optimism, buoyed by anticipated economic stability and favorable weather conditions, paints a complex yet hopeful picture for the coming months.
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