Two-wheelers lead growth with a 17 per cent increase, while passenger vehicle sales rise by 10 per cent; inventory levels reach historic highs
India’s automobile retail sales experienced a 14 per cent growth in July compared to the same period last year, according to data released by the Federation of Automobile Dealers Associations (FADA) on Monday. This growth was attributed to a surge in the rural economy, good product availability and the launch of new products.
Sequentially, automobile sales also saw a 7.3 per cent jump. In June, sales growth was relatively flat at 0.73 per cent year-on-year (Y-o-Y). The data indicated an increase in two-wheeler (2W) sales, which grew by 17 per cent. Passenger vehicle (PV) sales were not far behind, registering a 10 per cent Y-o-Y increase in July.
However, the data also highlighted a concerning rise in inventory levels, which have surged to a historic high of 67-72 days in PVs, equating to Rs 73,000 crore worth of stock. This poses a substantial risk to dealer sustainability. Among other categories, three-wheeler (3W) sales grew by 13 per cent and commercial vehicle sales by 6 per cent. Tractors, however, continued to underperform, falling by 12 per cent Y-o-Y.
PV sales saw robust growth, driven by new model launches and attractive pricing strategies. Commercial vehicle retail sales showed a 6 per cent Y-o-Y growth, with dealers reporting mixed sentiments. Positive factors included growth in the construction and mining sectors, while challenges such as continuous rainfall, negative rural market sentiment, poor finance availability and high vehicle prices were also noted. Some dealers achieved growth through small bulk deals and by leveraging increased market reach and product acceptability.
CS Vigneshwar, Vice President, FADA said, “The 2W segment experienced notable growth due to a thriving rural economy, positive monsoon effects and government support programmes 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.”
