Passenger vehicle (PV) retail sales in India saw a 10% year-on-year increase in July, attributed to the launch of new models and increased discounts, according to the Federation of Automobile Dealers Associations (FADA). Total PV retail sales in July rose to 3.2 lakh units from 2.9 lakh units in July 2023.
Dealers highlighted the advantages of improved product availability, appealing schemes, and a broader product range, as mentioned by FADA Vice President CS Vigneshwar. Despite challenges like heavy rains, subdued consumer sentiment, and stiff competition, dealers were able to maintain sales through robust promotions and incremental discounts.
Vigneshwar pointed out that while the growth is positive, it has led to a record-high inventory level of 67-72 days, amounting to stock worth 73,000 crores. This poses a significant risk to dealer sustainability, prompting the need for caution. FADA has called on PV original equipment manufacturers to be watchful of potential dealer failures due to the high inventory levels.
Two-wheeler retail sales in the previous month reached 14.4 lakh units, marking a 17% increase compared to July 2023. The segment experienced substantial growth due to a flourishing rural economy, favorable monsoon effects, and government support programs that boost rural incomes, as noted by Vigneshwar. The introduction of new products and improved stock availability also made a significant contribution, despite slowdowns in certain markets.
Commercial vehicle retail sales grew by 7% year-on-year to 80,057 units last month. Factors contributing to this growth included expansion in the construction and mining sectors, alongside challenges such as persistent rainfall, negative sentiment in rural markets, limited financial availability, and high vehicle prices, according to Vigneshwar.
However, tractor sales declined by 12% year-on-year to 79,970 units in July. FADA anticipates that the upcoming festive season, attractive schemes, and favorable monsoon conditions will help boost sales.
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