HomeAuto NewsExtreme heatwave hinders May car sales despite discounts, next month it may be rains: FADA
Extreme heatwave hinders May car sales despite discounts, next month it may be rains: FADA
The Indian auto retail sector saw 2.61% year-on-year growth in sales in May with improvement in two-wheelers, three wheelers and commercial vehicles sales while passenger vehicles or cars, and tractors saw a dip in sales, FADA data shows.
Did you want to buy a car, a two-wheeler or a three wheeler in May this year but delayed the plan because let’s face it, who will step out in that unbearable heat? The Federation of Automobile Dealers Associations of India’s (FADA) latest monthly report says extreme heat and elections significantly impacted footfall, with showrooms seeing an 18% drop in walk-ins.
This isn’t so hard to believe as a new rapid attribution study by an independent group of climate scientists and researchers at ClimaMeter shows heatwaves similar to those experienced in May in India were almost 1.5 degrees Celsius warmer than the warmest heat waves previously observed in the country.
But that’s not it, the rains may play a spoilsport too in the following months. India’s auto dealers believe extreme heat and above normal rains forecast could further impact sales and walk-ins.
“The near-term outlook for automobile retail is ‘cautiously optimistic’, influenced by a mix of positive and challenging factors across various segments,” FADA reiterated in its May report.
How India bought vehicles in May?
The Indian auto retail sector saw 2.61% year-on-year growth in sales in May with improvement in two-wheelers, three wheelers and commercial vehicles sales while passenger vehicles or cars, and tractors saw a dip in sales, FADA data shows.
On a month-on-month basis, vehicle sales decline over 5%. In fact, apart from three-wheelers and tractors, all other segments witnessed a decline on a monthly basis.
Source: FADA research
According to the auto dealers’ body, positive rural demand due to expected good monsoon and improved finance availability kept the counters ticking. Good movement in market loads, cement, iron ore, and coal sectors contributed positively despite supply constraints and lack of OEM marketing activities.
Also Read: Modi government likely to launch Rs 10,000 crore FAME 3 scheme in first 100 days of new term
Apart from extreme weather conditions, dealers believe elections and related uncertainties affected customer sentiment leading to delay purchasing decisions. Another challenge is financial constraints as market liquidity issues and high inventory levels strained dealership profitability, FADA said.
How all segments performed?
In the two-wheeler segment particularly, dealers reported supply constraints, lack of OEM marketing activities and impacts from extremely hot weather and elections. They, however, said positive rural demand due to expected good monsoon and improved finance availability kept the counters ticking.
For the sales dip in the cars or passenger vehicles segment, dealers cited the impact of elections, extreme heat and market liquidity issues as major factors.
“Despite better supply, some pending bookings and discount schemes, the lack of new models, intense competition and poor marketing efforts by OEMs affected sales. Additionally, increased customer postponements and low enquiries further contributed to the challenging market conditions,” FADA report said.
In the commercial vehicles segment, which saw YoY rise but 8% MoM decline, dealers reported that elections and extreme climatic conditions heavily impacted sales. Despite growth due to a low base from last year and increased bus orders, the industry faced challenges from wholesale pressures, government policy effects, and negative market sentiment.
However, good movement in market loads, cement, iron ore, and coal sectors contributed positively.
The changing market share
Even as Hero MotoCorp continued to hold the lion’s share in the two wheelers segment, its market share saw a significant six percentage points decline on a year-on-year basis in May.
FADA data implies, Honda Motorcycle and Scooter India and TVS Motor Company ate into Hero MotoCorp's share, as the former two saw a fair bit of increase in their market shares in May when compared with May 2024.
Also Read: Simplifying GST for the EV sector — these are the key changes and their likely implications anticipated
Among electric two-wheelers, Ola Electric is slowly and steadily witnessing an increase in market share while Ather Energy's share has declined significantly as sales more than halved in May compared to the same month last year.
Source: FADA research
In the cars segment, Maruti Suzuki continued to hold the largest market share of 39.97%, however, it was slightly lower than 40.86% in April. Hyundai Motor and Tata Motors, continued to retain the second and third spots, respectively, followed by Mahindra and Mahindra and Kia Motors.
Source: FADA research
Also Read: This auto company may outpace PV industry growth in FY25, says analyst
This isn’t so hard to believe as a new rapid attribution study by an independent group of climate scientists and researchers at ClimaMeter shows heatwaves similar to those experienced in May in India were almost 1.5 degrees Celsius warmer than the warmest heat waves previously observed in the country.
But that’s not it, the rains may play a spoilsport too in the following months. India’s auto dealers believe extreme heat and above normal rains forecast could further impact sales and walk-ins.
“The near-term outlook for automobile retail is ‘cautiously optimistic’, influenced by a mix of positive and challenging factors across various segments,” FADA reiterated in its May report.
How India bought vehicles in May?
The Indian auto retail sector saw 2.61% year-on-year growth in sales in May with improvement in two-wheelers, three wheelers and commercial vehicles sales while passenger vehicles or cars, and tractors saw a dip in sales, FADA data shows.
On a month-on-month basis, vehicle sales decline over 5%. In fact, apart from three-wheelers and tractors, all other segments witnessed a decline on a monthly basis.
| All India Vehicle Retail Data for May'24 | |||||
| CATEGORY | May'24 | Apr'24 | May'23 | MoM% | YoY% |
| 2W | 1534856 | 1643510 | 1497778 | -6.61% | 2.48% |
| 3W | 98265 | 80105 | 81825 | 22.67% | 20.09% |
| PV | 303358 | 335123 | 306305 | -9.48% | -0.96% |
| TRAC | 70065 | 56625 | 70813 | 23.74% | -1.06% |
| CV | 83059 | 90707 | 79807 | -8.43% | 4.07% |
| Total | 2089603 | 2206070 | 2036528 | -5.28% | 2.61% |
Source: FADA research
According to the auto dealers’ body, positive rural demand due to expected good monsoon and improved finance availability kept the counters ticking. Good movement in market loads, cement, iron ore, and coal sectors contributed positively despite supply constraints and lack of OEM marketing activities.
Also Read: Modi government likely to launch Rs 10,000 crore FAME 3 scheme in first 100 days of new term
Apart from extreme weather conditions, dealers believe elections and related uncertainties affected customer sentiment leading to delay purchasing decisions. Another challenge is financial constraints as market liquidity issues and high inventory levels strained dealership profitability, FADA said.
How all segments performed?
In the two-wheeler segment particularly, dealers reported supply constraints, lack of OEM marketing activities and impacts from extremely hot weather and elections. They, however, said positive rural demand due to expected good monsoon and improved finance availability kept the counters ticking.
For the sales dip in the cars or passenger vehicles segment, dealers cited the impact of elections, extreme heat and market liquidity issues as major factors.
“Despite better supply, some pending bookings and discount schemes, the lack of new models, intense competition and poor marketing efforts by OEMs affected sales. Additionally, increased customer postponements and low enquiries further contributed to the challenging market conditions,” FADA report said.
In the commercial vehicles segment, which saw YoY rise but 8% MoM decline, dealers reported that elections and extreme climatic conditions heavily impacted sales. Despite growth due to a low base from last year and increased bus orders, the industry faced challenges from wholesale pressures, government policy effects, and negative market sentiment.
However, good movement in market loads, cement, iron ore, and coal sectors contributed positively.
The changing market share
Even as Hero MotoCorp continued to hold the lion’s share in the two wheelers segment, its market share saw a significant six percentage points decline on a year-on-year basis in May.
FADA data implies, Honda Motorcycle and Scooter India and TVS Motor Company ate into Hero MotoCorp's share, as the former two saw a fair bit of increase in their market shares in May when compared with May 2024.
Also Read: Simplifying GST for the EV sector — these are the key changes and their likely implications anticipated
Among electric two-wheelers, Ola Electric is slowly and steadily witnessing an increase in market share while Ather Energy's share has declined significantly as sales more than halved in May compared to the same month last year.
| Two-Wheeler OEM | MAY'24 | Mkt Share (%) MAY'24 | MAY'23 | Mkt Share (%) MAY'23 |
| HERO MOTOCORP LTD | 4,45,838 | 29.05% | 5,31,037 | 35.45% |
| HONDA MOTORCYCLE AND SCOOTER INDIA (P) LTD | 3,90,924 | 25.47% | 2,70,305 | 18.05% |
| TVS MOTOR COMPANY LTD | 2,63,293 | 17.15% | 2,53,004 | 16.89% |
| BAJAJ AUTO GROUP | 1,75,179 | 11.41% | 1,86,571 | 12.46% |
| SUZUKI MOTORCYCLE INDIA PVT LTD | 81,840 | 5.33% | 61,714 | 4.12% |
| ROYAL-ENFIELD (UNIT OF EICHER LTD) | 63,239 | 4.12% | 69,658 | 4.65% |
| INDIA YAMAHA MOTOR PVT LTD | 54,488 | 3.55% | 44,529 | 2.97% |
| OLA ELECTRIC TECHNOLOGIES PVT LTD | 37,225 | 2.43% | 28,742 | 1.92% |
| ATHER ENERGY PVT LTD | 6,045 | 0.39% | 15,430 | 1.03% |
| PIAGGIO VEHICLES PVT LTD | 3,033 | 0.20% | 2,857 | 0.19% |
| CLASSIC LEGENDS PVT LTD | 2,440 | 0.16% | 2,369 | 0.16% |
| GREAVES ELECTRIC MOBILITY PVT LTD | 1,956 | 0.13% | 1,155 | 0.08% |
| Others Including EV | 9,356 | 0.61% | 30,407 | 2.03% |
| Total | 15,34,856 | 100% | 14,97,778 | 100% |
Source: FADA research
In the cars segment, Maruti Suzuki continued to hold the largest market share of 39.97%, however, it was slightly lower than 40.86% in April. Hyundai Motor and Tata Motors, continued to retain the second and third spots, respectively, followed by Mahindra and Mahindra and Kia Motors.
| PV OEM | MAY'24 | Mkt Share (%) MAY'24 | MAY'23 | Mkt Share (%) MAY'23 |
| MARUTI SUZUKI INDIA LTD | 1,20,954 | 39.87% | 1,20,150 | 39.23% |
| HYUNDAI MOTOR INDIA LTD | 44,456 | 14.65% | 46,378 | 15.14% |
| TATA MOTORS LTD | 41,550 | 13.70% | 42,516 | 13.88% |
| MAHINDRA & MAHINDRA LIMITED | 33,024 | 10.89% | 34,144 | 11.15% |
| KIA MOTORS INDIA PVT LTD | 18,759 | 6.18% | 17,278 | 5.64% |
| TOYOTA KIRLOSKAR MOTOR PVT LTD | 18,208 | 6.00% | 15,425 | 5.04% |
| SKODA AUTO VOLKSWAGEN GROUP | 6,278 | 2.07% | 6,857 | 2.24% |
| HONDA CARS INDIA LTD | 4,745 | 1.56% | 5,188 | 1.69% |
| MG MOTOR INDIA PVT LTD | 4,323 | 1.43% | 4,193 | 1.37% |
| RENAULT INDIA PVT LTD | 3,627 | 1.20% | 4,407 | 1.44% |
| NISSAN MOTOR INDIA PVT LTD | 2,021 | 0.67% | 2,320 | 0.76% |
| MERCEDES -BENZ GROUP | 1,182 | 0.39% | 1,214 | 0.40% |
| BMW INDIA PVT LTD | 948 | 0.31% | 985 | 0.32% |
| FORCE MOTORS LIMITED, A FIRODIA ENTERPRISE | 732 | 0.24% | 506 | 0.17% |
| PCA AUTOMOBILES INDIA PVT LTD | 439 | 0.14% | 849 | 0.28% |
| FIAT INDIA AUTOMOBILES PVT LTD | 346 | 0.11% | 666 | 0.22% |
| JAGUAR LAND ROVER INDIA LIMITED | 303 | 0.10% | 332 | 0.11% |
| BYD INDIA PRIVATE LIMITED | 163 | 0.05% | 146 | 0.05% |
| VOLVO AUTO INDIA PVT LTD | 116 | 0.04% | 160 | 0.05% |
| Others | 1,184 | 0.39% | 2,591 | 0.85% |
| Total | 3,03,358 | 100% | 3,06,305 | 100% |
Source: FADA research
Also Read: This auto company may outpace PV industry growth in FY25, says analyst
(Edited by : SonalMohan Jadhav)
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