Auto sales were back on track in February with sales totalling 1,775,424 units, up 15.95% from 1,531,196 units sold during the same month last year.
Manish Raj Singhania, President, Federation of Automobile Dealers Associations (FADA) said, “February ’23 continued to witness double-digit growth of 16% YoY but was still down by 8% when compared to the pre-COVID month of February 2020.”
OBD norms and 2Ws
The two-wheeler (2W) category saw growth of 15% YoY but was down by 14% when compared to February 2020. In numbers, the industry saw sales of 1,267,233 2Ws, against 1,104,309 units sold in the same month last year.
Singhania added, “The change in OBD norms which come into effect from April along with the marriage season kept sales ticking. Overall, high inflation and poor sentiment have kept customers at bay.”
Market leader, Hero MotoCorp's share fell from 31.55% in February 2022 to 30.83% in the same period this year.
3Ws breach pre-COVID levels
The three-wheeler (3W) segment, for the first-time, breached the pre-pandemic level of February '20, with 3.3% growth. The segment grew 81.47% YoY with 72,994 units were sold in February '23 against 40,224 3Ws in the same period last year.
According to Singhania, this category has seen rapid growth due to the Central and State Governments' subsidies along with promotional schemes done by the states. Along with this, he added, aggressive finance schemes continue to aid growth for this category.
The e-rickshaw category grew 88.64% YoY, while the e-rickshaw with cart category grew 38.57%. With 27,678 3W sales, Bajaj Auto was the top seller in this category and grew its market share from 35.27% in February'22 to 37.9%.
PVs Continue To Grow
The passenger vehicle (PV) category continues to grow despite the slow recovery in rural markets. Against 258,736 PVs in February '22, this year saw sales of 287,182 units translating into 10.99% YoY growth.
“Launch of new models, continuously improving supply coupled with the healthy booking to cancellation ratio and wedding bells kept the momentum going for this already well-to-do segment,” said Singhania.
With 118,892 PV sales, Maruti Suzuki continues to be the leader even while its market share fell from 42.36% last year to 41.40% in February '23.
CVs & Tractors
The commercial vehicle category has also shown robust growth of 17% YoY though it fell by 10% from the pre-COVID month of February '20.
According to Singhania, walk-in enquiries improved during the month and demand also increased due to changes in OBD norms which will see price hikes. Infrastructure spending is also helping in better sales. Market leader, Tata Motors reported sales of 30,280 units with a share of 38.32%.
In tractors, Mahindra & Mahindra continued to be ahead with 15,884 units sold and 23.02% market share.
While March looks good too, FADA remains cautious till the time a better monsoon forecast is announced by IMD.
India’s Chief Economic Advisor V Anantha Nageswaran has also said that urban demand recovery is taking place at a faster pace than rural. With a sharp slowdown in private expenditure to a 2-year low, there is clearly a softening in household spending demand amid inflationary pressure.
Moreover, March has a host of festivals like Holi, Ugadi, Gudi Padwa, Navratri etc which will push auto sales. With vehicles also more easily available and OBD norms kicking in from April (which will increase prices), OEMs will roll out many schemes to woo buyers in the coming weeks .