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Demand for SUVs, new models, increased availability, effective marketing, consumer schemes and wedding season led to strong passenger vehicle (PV) retail sales in January 2024. According to the Automobile Federation's announcement, this sector reported an increase of 13.3%. According to data from the Dealers Association of India (FADA), sales totaled 3,93,250 units last month compared to 3,47,086 units in January 2023.
“However, despite this achievement, serious concerns remain regarding solar PV inventory levels, currently in the 50-55 day range. Immediate readjustment of production by OEMs is required to avoid oversupply issues. In this dynamic industry, OEMs must ensure sustained success and overall market stability as adaptability is key. There is a need to balance innovation with strategic production planning,” said FADA Chairman Manish Raj Singhania.
Apart from solar power, the 3W sector recorded a growth of 37%, revealing a mixed picture. While growth and an optimistic outlook continue in the commercial 3W market, increased competition from electric models highlights major changes in the market.
All vehicle categories – 2W, PV, tractor and CV – achieved positive growth of 15%, 13%, 21% and 0.1% respectively compared to the previous year.
February 2024 presents a multifaceted outlook for the Indian auto retail industry. Factors driving growth across the sector include the continuing wedding season and expected agricultural sales revenues providing a continued positive base for consumer spending, supporting growth in the 2W segment. .
Increasing vehicle availability and successful introduction of new models across all segments has the potential to stimulate market demand, with favorable budgetary policies post-European Union leading to growth in the CV sector, especially in infrastructure-related industries. is expected to be promoted. The government's optimistic crop production forecasts and continued support measures are expected to boost the rural economy, potentially leading to further increases in tractor demand in rural areas and increased sales of entry-level 2Ws. “Sustained supply bottlenecks for certain high-demand models are a risk factor for consistent growth across the 2W, CV and PV segments, highlighting the need for OEM optimization of production lines.” he added.
Overall, the industry outlook leans toward cautious optimism, but shows potential for growth in the near term.
