In a promising start to the calendar year, the Federation of Automobile Dealers Associations (FADA) reports a robust 15% growth across all vehicle categories. The report highlights significant performances in two-wheelers (2W), three-wheelers (3W), passenger vehicles (PV), tractors, and commercial vehicles (CV).
Leading the growth charge, two-wheelers demonstrated a substantial 15% increase, closely followed by three-wheelers at 37%, passenger vehicles at 13%, tractors at 21%, and a modest 0.1% growth in commercial vehicles. This growth is attributed to various factors, including the enduring strength of demand in the rural market, government support for the rural economy, and optimistic crop production estimates.
The passenger vehicle segment achieved a remarkable milestone, retailing 393,250 vehicles in January 2024, marking a new all-time high and surpassing the previous record set in November 2023. Key survey findings from the report reveal that the average inventory for passenger vehicles ranges from 50-55 days, while two-wheelers maintain an average inventory of 10-15 days.
Tractor sales experienced a positive rebound after previous months' slowdown, possibly driven by expectations of a fruitful Rabi crop output and favourable weather conditions for wheat cultivation. The commercial vehicle segment, while facing a slight demand taper in the fourth quarter due to a high base effect and upcoming elections, holds positive long-term fundamentals.
FADA President, Manish Raj Singhania, commented on the report, stating, 'January 2024 began on a promising note for the calendar year, demonstrating 15% overall retail growth compared to the previous year. Several positive trends in the 2W market signalled a robust start to the year.'
Despite the overall positive trends, the report highlighted complexities within the industry. The three-wheeler sector displayed a mixed landscape, with intensified competition from electric models, indicating a significant market shift with 55% now electrified.
The commercial vehicle segment faced a complex scenario in January 2024, showcasing limited year-on-year growth. Factors such as increased infrastructure development, port activity, and positive crop yields fuelled certain market segments. However, challenges like extreme weather, tightened liquidity, high vehicle costs, and restricted financing hindered momentum.
Looking ahead to February 2024, the industry anticipates a multi-faceted outlook, with positive factors including ongoing marriage seasons, anticipated income from agricultural sales, successful new model launches, and favourable post-Union Budget policies. However, challenges persist, including market uncertainty due to upcoming elections, persistent supply bottlenecks, and fluctuating market liquidity.
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