FADA Unveils Strong Growth In December 2023

Mobility Outlook Bureau
08 Jan 2024
10:51 AM
2 Min Read

Anticipating slowdown during the Kharmas period, the industry is approaching 2024 with cautious optimism.

FADA Posts Strong Growth In December 2023 mobility outlook

The Federation of Automobile Dealers Associations (FADA) unveiled a strong performance in the Indian auto retail sector for December 2023 and the entire calendar year, suggesting promising prospects for the industry. According to FADA's vehicle retail data, December 2023 witnessed an impressive 21% year-on-year growth in auto retail. Notably, all categories reported positive growth during this period, with 2-wheelers leading at 28%, 3-wheelers at 36%, Passenger Vehicles (PV) at 3%, Tractors at 0.2%, and Commercial Vehicles (CV) at 1.3%.

The positive momentum extended throughout the entire Calendar Year 2023, showcasing a remarkable overall growth of 11% year-on-year. Each segment contributed to this growth, with 2-wheelers marking a 9.5% increase, 3-wheelers soaring by 58.5%, PVs demonstrating an 11% rise, Tractors growing by 7%, and CVs recording an 8% uptick in sales.

While the auto retail sector celebrated this robust performance, there is anticipation of a possible slowdown due to the inauspicious Kharmas period, spanning from December 16, 2023, to January 15, 2024. This period is expected to lead to a temporary dip in demand.

Inventory management remains a key concern for the industry, as high inventory levels persist in the PV category despite a slight decline observed at the end of December. However, the near-term outlook for the auto retail sector remains positive. Industry players are gearing up to launch new models and address inventory challenges, particularly in the PV category.

Buoyed by a rebound in consumer sentiment, as indicated by the December 2023 CMIE Index, the forecast for Calendar Year 2024 in the auto retail sector is optimistic. FADA emphasises the importance of strategic supply and inventory management to leverage the anticipated positive trends in the coming year.

FADA President, Manish Raj Singhania, expressed satisfaction with the overall performance in December 2023, citing a 21% YoY growth. All categories, including 2W, 3W, PV, Trac, and CV, posted positive figures, reflecting a comprehensive industry uplift.

The 2W category, in particular, witnessed robust growth driven by factors such as an abundance of marriage dates, harvest payments to farmers, and favourable weather conditions. Meanwhile, the CV category experienced positive growth propelled by increased industrial activity and infrastructure development, with promising trends in the bus segment.

In the PV category, SUVs saw strong demand, fuelled by aggressive year-end promotions and the introduction of new models. However, concerns linger over high inventory levels despite a slight decrease by the end of the year, underscoring the need for further moderation in inventory management.

Looking ahead to January 2024, the auto retail sector maintains a cautiously optimistic outlook across 2W, CV, and PV categories. The 2W sector expects a positive trend post mid-January, while CVs are poised for growth, especially after the same period. The PV category is focused on clearing pending bookings, launching new 2024 models, and overcoming challenges in supply constraints and shifting consumer demands.

The industry remains well-positioned for growth, with a rebound in consumer confidence and a positive outlook for the new calendar year. Meticulous supply and inventory management are identified as critical factors for success in navigating the dynamic market conditions and capitalising on the positive trends ahead.

Also Read

Surge In Sales: FADA Releases November 2023 Vehicle Retail Data

Share This Page