Indian Auto Market Sees Subdued Sales in April Amid High Base Effect and Election Season

The Indian automotive sector kicked off the new fiscal year on a relatively muted note, with domestic passenger vehicle (PV) sales experiencing minimal growth in April. According to industry estimates, PV sales reached approximately 338,341 units, representing a modest increase of just 1.76 percent compared to the same period last year.

Industry experts attribute this lackluster performance to a combination of factors, including the high base effect from the previous year's robust sales and subdued demand driven by the ongoing Lok Sabha elections. The atmosphere of uncertainty surrounding elections typically leads to cautious consumer spending, impacting sales across various industries, including automobiles.

Maruti Suzuki India, the country's largest passenger vehicle manufacturer, reported flat domestic sales of 137,952 units in April, a marginal increase from 137,320 units in the corresponding month last year. Similarly, Hyundai Motor India, the second-largest PV manufacturer, witnessed a modest 1 percent growth with sales totaling 50,201 units. Tata Motors, including electric vehicles, recorded a 2 percent rise in total domestic PV sales, reaching 47,883 units.

Partho Banerjee, Senior Executive Officer of Marketing & Sales at Maruti Suzuki, acknowledged the challenges posed by the high base effect and the impact of the election season on consumer sentiment. However, he expressed optimism that the market dynamics would change post-elections.

Tarun Garg, Chief Operating Officer of Hyundai Motor India, echoed similar sentiments, emphasizing that the industry's growth trajectory in April was in line with earlier projections of low single-digit growth for the year. Garg highlighted the positive outlook for rural sales, fueled by expectations of a normal monsoon, improved road infrastructure, and rising consumer aspirations.

In contrast, Toyota Kirloskar Motor reported a significant year-on-year increase of 32 percent in total wholesales, reflecting a strong foundation for the year ahead, according to Sabari Manohar, Vice President of Sales-Service-Used Car Business.

However, MG Motor India experienced a slight decline in retail sales, down 1.45 percent to 4,485 units.

In the two-wheeler segment, TVS Motor Company posted a robust 29 percent growth in the domestic market, reaching 301,449 units. Hero MotoCorp and Royal Enfield also reported positive growth figures of 33 percent and 9 percent, respectively, in domestic sales.

Despite the subdued sales in April, industry stakeholders remain cautiously optimistic about the outlook for the remainder of the fiscal year, anticipating a rebound in consumer sentiment post-elections and continued growth in key segments of the automotive market.