By The Indian auto industry witnessed a notable 13% growth in sales in February 2024, with all segments showing positive performance, according to a report by the Federation of Automobile Dealers Associations (FADA).
Overall Performance
All segments, including passenger vehicles, two-wheelers, three-wheelers, commercial vehicles, and tractors, reported year-on-year increases in sales. However, there was a slight month-on-month decline, indicating lower sales compared to January 2024.
Passenger Vehicle Segment Records High Sales
The passenger vehicle segment recorded a remarkable 12% year-on-year growth in February 2024, achieving record sales figures for the month. This growth was attributed to the introduction of new vehicles and improved vehicle availability at showrooms.
Concerns Over Inventory Levels
Despite the positive growth, FADA highlighted concerns regarding elevated inventory levels, currently ranging from 50-55 days. The organization suggested that original equipment manufacturers (OEMs) should adjust production to alleviate this issue, as high inventory levels impose financial burdens on dealers.
Boost in Two-Wheeler Segment
The two-wheeler segment experienced a 13.25% year-on-year growth in February 2024, driven by increased demand from rural areas, premium model preferences, and strong performance of entry-level models. However, there was a slight 1.32% decline compared to January 2024.
Rise of Electric Three-Wheelers
The three-wheeler segment reported a significant 24% year-on-year growth in February 2024, with electric vehicles accounting for 54% of this growth. The surge in demand was fueled by first-time users and a shift towards electric e-rickshaws.
Cautiously Optimistic Outlook
While the near-term outlook appears cautiously optimistic, external factors such as rural crop failures and financial liquidity constraints could dampen market sentiment. The anticipation of elections also casts a shadow, particularly in the commercial vehicles segment.
“FADA remains vigilant of external factors that could pose hurdles to sustained growth,” remarked the organization.
