- Monday, March 31, 2025
Larger questions looming over the Indian public pertaining to the impact of the new government’s policies on individual’s income and apprehension related to carrying huge sums of money during the election could affect automobile sales in May, says FADA.
By: indiaweekly.biz Staff
INDIA’S automobile sales in May could be affected by the uncertainty around the country’s ongoing national elections and it could happen despite the growing interest for new car models that are being launched, its top automobile retail industry body has said.
The Federation of Automobile Dealers Association (FADA) told Reuters told uncertainty around the polls has continued to affect the market sentiment, “delaying consumer conversions and stalling purchasing decisions”.
The marathon elections, spread over a period of 47 days including the result date (June 1), kicked off on April 19 and three of seven phases have been completed so far. Prime minister Narendra Modi and his Bharatiya Janata Party-led National Democratic Alliance are seeking a rare third consecutive term in this election.
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The elections are also seeing a highly polarised campaign with Modi and his opposition attacking each other over diverse issues, including religion.
A relatively lower voter turnout in this year’s election seems to have unsettled the campaign managers of the Hindu nationalist BJP, reinforcing the question of whether the party and its allies can achieve the landslide victory as projected by several opinion polls not too long ago.
Analysts have said that concerns over the new government’s financial policies could leave an impact on people’s income, coupled with limitations on moving large amounts of cash during the polls could discourage the consumers from buying new vehicles, Reuters added. Four of the seven phases of the election will be held in May.
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The results will be announced on June 4.
Retail sales still grew 27 per cent year-on-year in April and according to FADA, it happened partially due to growing consumer interest in new models being launched.
The body tracks vehicle sales by dealers to consumers. It expects the interest to persist in May.
“The auto industry remains cautiously optimistic about its near-term outlook,” it was quoted as saying by Reuters.
In April, retail car sales were up by nearly 16 per cent, FADA revealed, after plummeting more than six per cent the month before.
Sales of vehicles are closely monitored since it is a key indicator of private consumption in the world’s fifth-largest economy and the automobile sector contributes around seven per cent of the country’s economy.
In the case of two-wheelers, heavy demand continued, boosted by festive buying in parts of northern India besides new launches.
Their sales grew by more than 33 per cent in April, registered as the largest growth so far this calendar year.
Manish Raj Singhania, president of FADA, attributed the rise to stable fuel prices, a favourable monsoon outlook, festive demand and the marriage season which is underway.
“New model launches also helped drive growth, despite some delays in supply,” he was quoted as saying by Reuters.
(With Reuters inputs)
