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Auto Sales Prediction: Due to unseasonal rains, high interest rate on vehicle loans and increased cost due to new regulatory norms, the auto industry needs to be cautious in the current financial year. Unseasonal rains are especially affecting rural demand.
According to the Federation of Automobile Dealers Association (FADA), an organization of vehicle dealers, the growth of the industry is going to decline. The vehicle industry registered a double digit growth of 21 percent in total retail sales in FY 2022-23. After a gap of two years, this was the first year free of covid-effect for the industry.
The growth of the industry is expected to come down to single digits in the current financial year amid high base effect. According to the data shared by the dealer association, the total domestic vehicle retail sales stood at 2,21,50,222 units in FY 2022-23 as against 1,83,27,326 units in FY 2021-22.
Shashank Srivastava, senior executive officer (marketing and sales), Maruti Suzuki India, said the unseasonal rains in March and early April may have dampened sentiment in rural areas.
Unseasonal torrential rains in north and central India have destroyed major rabi crops and delayed harvesting, which will negatively impact sales in rural areas, Fada said. Another concern of vehicle manufacturers is the high interest rates on vehicle loans.
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