PV retail sales rise 13.3% to 3,93,250 units in January: FADA

Representation Image ( courtesy: PIxabay)

The new year has started off on a positive note for Indian carmakers as passenger vehicle (PV) retail sales jumped by 13.3 per cent  in January 2024 due to continued buoyancy in the Sports Utility Vehicle (SUV) market, showed FADA data. As per the Federation of Automobile Dealers Associations, carmakers have retailed a total of 3,93,250 units last month as against 3,47,086 units in January 2023.

FADA President Manish Raj Singhania said, "SUV demand along with the introduction of new models, greater availability, effective marketing, consumer schemes and the auspicious wedding season underpinned this strong performance.”

It may be recalled that domestic PV wholesales witnessed a growth of 13.9 per cent at 3,94,571 unit sales in January 2023 from 3,46,529 units in in the same month last year.  Industry players attributed the growth in vehicle despatches to record SUV sales, exceptional response to new launches, rising production levels, and robust economic growth.

However, he maintained that despite record sales, serious concerns remain regarding PV inventory level, which is now in the 50-55 day range.

“This calls for immediate recalibration of production from OEMs to better align with actual market demand and avoid future oversupply issues," he noted.

It was reported earlier that Indian carmakers reported record sales in January as they looked to build up inventory of new and refreshed models this calendar year.

"As adaptability is crucial in this dynamic industry, OEMs must balance innovation with strategic production planning to ensure sustained success and overall market stability," maintained Singhania.

Meanwhile, two-wheeler sales increased 15 per cent year on year to 14,58,849 units in January as compared to the sales during the same period last year.  According to FADA, the demand for two-wheelers remains steady, fueled by continued strength In rural market.

Singhania reckons that improved vehicle availability, due to adjustments post-OBD 2 norm implementation, the introduction of new models and a shift towards premium options have collectively contributed to increased demand for two-wheeler sales.

“This, combined with a good harvest, a positive marriage season and effective follow-ups and offers, indicate a favourable trajectory for the two-wheeler sector,” stated Singhania.

The data shared by auto retail body also revealed that Commercial Vehicle (CV) sales witnessed flat sales growth last month at 89,208 units. However, three-wheeler retail sales witnessed an increase of 37 percent to 97,675 units from 71,325 units in January 2023.

Tractors sales rose 21 percent year on year to 88,671 units in January.

The total automobile retail sales last month stood at 21,27,653 units, up 15 percent from 18,49,691 units in January 2023.

Near-term outlook

For February 2024, FADA anticipates a multi-faceted outlook, with positive factors such as ongoing marriage seasons, anticipated income from agricultural sales, successful new model launches, and favourable post-Union Budget policies boosting volumes. However,  it believes that some ongoing challenges such as market uncertainty due to upcoming elections, persistent supply bottlenecks, and fluctuating market liquidity may act as a dampener.