The passenger vehicle segment achieved a new all-time high in January, retailing 3,93,250 vehicles and surpassing the previous record set in November 2023. However, a persistent concern lies in high inventory levels, which still hover in the 50-55-day range, posing a challenge for auto dealers.
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. Demand for 2Ws remains steady, fuelled by continued strength in the rural market. This segment is likely to benefit from the government's good crop production estimates and continued support for the rural economy. Tractors sales rose 21 percent year on year to 88,671 units in January.
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. The commercial vehicle segment might experience a slight demand taper in the fourth quarter due to a high base effect and upcoming elections.
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 favorable 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.
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