NEW DELHI: The Federation of Automobile Dealers Association (
FADA
), automobile dealers body, on Wednesday said that automobile sales can be affected because of the uncertainty surrounding the ongoing Lok Sabha elections, despite a rise in
customer interest
in the launch of upcoming models.
“
Election uncertainty
continues to affect market sentiment, delaying customer conversions and stalling purchasing decisions,” said FADA in a statement.
Analysts worry that the potential impact of a new financial strategies on individuals’ earnings, along with limitations on transferring significant sums of money during the election might deter consumers from making purchasing new vehicles.
Meanwhile, retail sales increased by 27% compared to the previous year in April due to increased consumer interest in launches of
new models
, as per Fada’s data.
“The auto industry remains cautiously optimistic about its near-term outlook,” it said.
Auto sales
are closely monitored as an important indicator of private spending in India. The automotive industry contributes approximately 7% to the Indian economy.
Retail car sales grew nearly 16% in April after falling more than 6% in March, said Fada.
Two-wheelers, in the meantime, kept witnessing high demand, supported by festive purchases in certain areas of North India and a series of new product introductions.
In April, the sales of two-wheelers increased by over 33%, marking the highest growth this year.
The rise was linked to by stable fuel prices, a favourable monsoon outlook, festive demand, and the ongoing marriage season, as per Fada president Manish Raj Singhania.
“New model launches also helped drive growth, despite some delays in supply,” said Singhania.
