Apex dealer body, the Federation Of Automobile Dealers Associations (FADA), has released retail sales data for the month of July 2024. Cumulative sales in the auto sector showed a strong year-over-year (YoY) growth of 13.84 per cent, influenced by many factors. Passenger vehicle sales have rebounded after low sales for the past two months. Sales in the two-wheeler and three-wheeler segments also showcased double-digit growth, while commercial vehicle sales were also on the high. Tractor sales however saw a notable decline in the month compared to last year.
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C S Vigneshwar, FADA Vice President provided insights on July 2024’s auto retail performance, stating, “Following a deficient June, monsoons in India have intensified, resulting in above-normal cumulative rainfall for July. Despite these challenges, India’s automobile retail sector saw a YoY growth of 13.84 per cent, with almost all categories witnessing an increase. Two-wheelers (2W) grew by 17per cent, three-wheelers (3W) by 13 per cent, passenger vehicles (PV) by 10 per cent and commercial vehicles (CV) by 6 per cent. Tractors, however, continued to underperform, falling by 12 per cent YoY.”
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Passenger vehicle sales stood at 3,20,129 units in July 2024, a year-over-year growth of 10.18 per cent over July 2023. The sales figure also represents a 13.70 per cent growth over June 2023 when sales stood at 2,90,564 units. The increase in PV sales is mainly attributed to the new model launches and attractive schemes offered by dealers. However, the data also reveals that inventory levels have risen and that dealers in India cumulatively hold stock worth Rs 73,000 crore.
“PV sales saw a robust 14 per cent growth, driven by new model launches and attractive pricing strategies. Dealers reported benefits from good product availability, attractive schemes, and a wider range of products. Nonetheless, heavy rains, low consumer sentiment, and intense competition posed challenges. Some dealers managed to sustain sales through strong promotions and incremental discounts. However, this growth is accompanied by a significant concern. Inventory levels have surged to a historic high of 67-72 days, equating to Rs 73,000 crores worth of stock. This poses a substantial risk for dealer sustainability, necessitating extreme caution.” said Vigneshwar.
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Two-wheeler sales in July 2024 stood at 14,43,463 units, representing a YoY increase of 17.17 per cent, and a 4.91 per cent increase in sales over June ’24. Three-wheeler sales on the other hand stood at 1,10,497 units in July ’24, which represents a 12.88 per cent increase over July ’23, when sales stood at 97,891 units. The three-wheeler sales data for the month, also represents a notable 17.15 per cent over 94,321 units sold in June 2024.
“The 2W segment experienced notable growth due to a thriving rural economy, positive monsoon effects, and government support programs enhancing rural incomes. The introduction of new products and better stock availability also contributed significantly, despite market slowdowns in certain regions, excessive rains, and increased competition. The segment also saw an increase in EV sales due to discounts and EMPS scheme deadline.” said Vigneshwar.
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