How SUV Demand Fuelled PV Sales In January The sector reported a jump of 13.3 per cent, showed Federation of Automobile Dealers Associations (FADA) data, retailing a total of 3,93,250 units last month as against 3,47,086 units in January 2023
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SUV demand, new models, greater availability, effective marketing, consumer schemes and the wedding season, led to a strong performance of passenger vehicle (PV) retail sales in January 2024. The sector reported a jump of 13.3 per cent, showed Federation of Automobile Dealers Associations (FADA) data, retailing a total of 3,93,250 units last month as against 3,47,086 units in January 2023.
"However, despite this achievement, serious concerns remain regarding PV inventory levels, 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. As adaptability is crucial in this dynamic industry, OEMs must balance innovation with strategic production planning to ensure sustained success and overall market stability," said FADA President Manish Raj Singhania.
Apart from PV, the 3W sector revealed a mixed landscape as it recorded a 37 per cent growth. While growth and optimism continue within the commercial 3W market, intensified competition from electric models underscores a significant market shift.
All vehicle categories – 2W, PV, Tractors, and CV – achieved positive YoY growth of 15 per cent, 13 per cent, 21 per cent, and 0.1 per cent respectively.
February 2024 presents a multi-faceted outlook for Indian Auto Retail. Factors that would promote growth across sectors are the ongoing marriage season, anticipated income from agricultural sales provide a positive foundation for continued consumer spending, supporting growth in the 2W segment.
Increased vehicle availability and successful new model introductions across all segments hold the potential to stimulate market demand, favourable post-Union Budget policies are expected to drive growth in the CV sector, particularly within infrastructure-related industries. The government's optimistic crop production estimates and continued support measures are expected to boost the rural economy, potentially leading to even higher tractor demand and increased sales of entry-level 2Ws in rural areas. "Persistent supply bottlenecks for specific high-demand models present a risk factor for consistent growth across 2W, CV and PV segments, highlighting the need for OEM optimization of production lines," he added.
On an overall basis, the Industry Outlook leans towards cautious optimism but shows growth potential in the near term.
