Unseasonal rains, high-interest rates make auto industry cautious about growth prospects in FY24: FADA
The Federation of Automobile Dealers Associations (FADA) has said that unseasonal rains impacting rural demand, high-interest rates on auto loans and increased costs due to new regulatory norms are making the automotive industry cautious about the growth prospects in the current fiscal (FY24). The industry --- which witnessed the first full year without any impact of COVID-19 in FY23 after a gap of two years with double-digit growth of 21 per cent in overall retail sales -- is now set to clock tapered growth in the low single-digit due to a high base.
As per data shared by the dealers' body, the total domestic vehicle retail sales stood at 2,21,50,222 units in FY23 against 18,3,27,326 units in FY22. FADA said the untimely rains and hailstorms in north and central India have destroyed key rabi crops and delayed harvesting, (and) will have a negative impact on rural sales. It noted that Another concern for automakers is the high-interest rates on automobile loans.
FADA on its outlook for the low single-digit growth of vehicle sales said it is due to a high base, inflationary pressures, routine price hikes and regulatory changes. Additionally, it said, there have been predictions of the possibility of El Nino's arrival later this year, which could lead to poor monsoons, hampering rural India's growth potential.
