In July 2024, automobile retail sales in India experienced a robust 14% year-on-year growth, driven by a strong rural economy, improved product availability, and the launch of new products. Two-wheeler sales surged by 17%, supported by a thriving rural economy, favourable monsoon conditions, and government support programs enhancing rural incomes. Passenger vehicles (PV) also saw a 10% increase, fuelled by new model launches and attractive pricing strategies. However, this growth coincided with concerns over inventory levels reaching a historic high of 67-72 days in PVs, posing risks to dealer sustainability. Despite these challenges, dealers leveraged strong promotions and discounts to sustain sales.
The Federation of Automobile Dealers Associations (FADA) highlighted the need for vigilance among PV original equipment manufacturers (OEMs) regarding high inventory levels and potential dealer failures. Additionally, FADA emphasized the importance of stringent checks by financial institutions before releasing inventory funding to prevent non-performing assets (NPAs). Commercial vehicle sales grew by 6%, supported by growth in the construction and mining sectors, despite challenges such as continuous rainfall and poor finance availability. While the monsoons brought above-normal rainfall in July, the distribution was uneven, affecting kharif sowing. The sown area decreased by 2.4% compared to July 2023, influenced by El Nino disruptions in the previous year.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.