Auto Industry Navigates Volatile Terrain Amid Geopolitical Tensions
Passenger vehicle retail sales in India saw a 3% decline in May, hit by consumer delays against a backdrop of geopolitical tensions. Entry-level models faced the toughest hit, while two-wheeler sales rose 7% due to robust demand in rural areas. Commercial vehicle sales dropped by 4% amid adverse sentiment.
- Country:
- India
In May, passenger vehicle retail sales in India fell by 3% year-on-year as geopolitical tensions, particularly the India-Pakistan conflict, led consumers in several states to postpone purchases. The Federation of Automobile Dealers Associations (FADA) reported that registrations decreased to 3,02,214 units from 3,11,908 units in the previous year.
Entry-level models suffered the most due to constrained financing and weak consumer sentiment. Dealers attributed buyer hesitancy to heightened worries about border tensions in regions such as Jammu & Kashmir, Punjab, Rajasthan, and Gujarat. Although bookings were healthy, conversion to sales lagged due to challenges with margin-money and deferred decisions.
Despite a 4% decline in commercial vehicle sales, two-wheeler registrations rose by 7%, thanks to a strong Rabi harvest and increased demand in semi-urban and rural markets. The auto industry is cautiously optimistic about June, as stakeholders monitor liquidity and model availability while contending with global supply-chain challenges.
(With inputs from agencies.)
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