Passenger Vehicle Sales Flat In March, Suggest A Slower FY24: Analysts

Passenger vehicle sales remained flat in March as growth continued to slow down and erratic rainfall aggravated weakness in the rural market, according to analysts.

Enquiries have moderated with demand remaining tepid during the auspicious days and bookings were lower than expected for the budget models due to rising interest rates, brokerages said.

The flat sales for passenger vehicles in the month strengthened the expectations of much lower growth for the car industry in the next financial year. Analysts expect growth to fall to mid-to-high single digits.

“Passenger vehicle enquiries and footfalls have slowed down sharply and waiting periods have reduced further,” Nomura said.

In the two-wheeler category, the sales continued to grow in single digits in March but analysts flagged gradual or no improvement.

Growth in dispatches is restricted due to stable retails and model-changeovers because of new on-board diagnostics norms, Emkay Global said.

In certain states, enquiries improved during Navratri season, while urban demand remained stable, Motilal Oswal said.

The commercial vehicle industry gained from the pre-buying as prices are expected to rise up to 5% from April due to the new emission norms.

However, the medium and heavy vehicles continued to fare better than light commercial vehicles. Nomura said there was no major pre-buying in the light vehicles.

Analysts see a more positive picture of commercial vehicles than other categories in the auto industry for the month.

They are anticipating low single-digit growth, with some predicting a decline, in the sales of tractors due to unseasonal rains in certain states.

Demand began to deteriorate in the second half of the month across the northern and central states, including Punjab, Madhya Pradesh, Uttar Pradesh and Maharashtra, Motilal Oswal said.