PV retail sales rise 12% at 3,30,107 units in February 2024: FADA data

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As per the data shared by Federation of Automobile Dealers Associations (FADA), Passenger Vehicle (PV) segment witnessed a 12 percent Year-on-Year (YoY) growth in February 2024 at 3,30,107 units vis-à-vis 2,93,803 units in the same month last year. This marks the highest February sales figures ever, as per the auto retail body.

"Passenger vehicles saw the highest sales figures ever recorded for the month of February. This upward trajectory was propelled by the strategic introduction of new products and enhanced vehicle availability ,"FADA President Manish Raj Singhania said in a statement.

Passenger Vehicle (PV) wholesales continued to move northwards for the second month in a row this year as carmakers have dispatched nearly 373,177 units to their dealers in February as against 335,324 units in the same month last year, as per industry data.  The top five carmakers such as Maruti Suzuki, Hyundai Motor India, Tata Motors, Mahindra and Mahindra (M&M) and Toyota Kirloskar Motor (TKM) logged record YoY domestic sales last month.

According to Singhania, while the PV sector benefits from favourable customer sentiment and the successful introduction of models in high demand, the “persistently elevated” inventory levels, remaining at 50-55 days, present a significant concern.

In his view, “It is imperative for PV OEMs to undertake adjustments in production to mitigate these high inventory levels, thereby reducing the financial burden of carrying costs on dealers as it is vital for maintaining the financial health of dealers.”

India’s overall automobile retail sales, across all categories, witnessed a robust 13.07 percent growth in February at 20,29,541 units as against 17,94,866 units in the same month last year, as per FADA data.

FADA also stated that two-wheeler sales stood at 14,39,523 units, up 13.25 per cent, as compared to 12,71,073 units in the same period last year.

“The growth in the two-wheeler segment was driven by the rural sector, demand for premium models and strong performance of entry-level segments with broader product availability and compelling offers enhancing product acceptance,” added Singhania.

He went on to add, “Factors like favourable marriage dates and improved economic conditions also contributed to this positive growth.”

Commercial Vehicle retail sales also rose to 88,367 units in February, registering a growth of 5 per cent as against the same month last year. FADA president averred that this segment grew despite obstacles like “cash flow shortages” and “election-related purchase deferrals,” highlighting the sector's “resilience” and “gradual recovery”.

Furthermore, three-wheeler retail sales saw a growth of 24 per cent year on year to 94,918 units last month. Similarly, tractor sales grew 11 per cent to 76,626 units last month from 69,034 units in February last year.

Buoyancy foreseen 

For the near term outlook, the auto retail sector is influenced by a blend of positive trends and challenges. Singhania believes that the confluence of financial year-end buying incentives, improved availability of vehicles and seasonal factors such as marriages, is likely to propel demand for passenger cars.

“Supply constraints further complicate the landscape, especially in the PV segment, where the availability of popular variants remain a concern,” noted Singhania.

FADA foresees positive signals from the rural areas along with an increased demand for premium and entry-level segments is expected to bolster the two-wheeler market.

On similar lines, three-wheeler and CV sectors anticipate a boost in sales, driven by the financial year-end rush and an infusion of funds into the market, as per the auto retail body.

Similarly, both the 3W and CV sectors anticipate a boost in sales, driven by the financial year-end rush and an infusion of funds into the market, which is expected to stimulate purchases.

"Overall, the near-term outlook for March 2024 in the auto retail sector is one of cautious optimism," stated Singhania.