With rural markets on a recovery mode, vehicle retailers are optimistic of the momentum continuing in the coming month. FADA President Manish Raj Singhania said the year has started on a positive note, with retail sales growing across categories last month.
Sales of two-wheelers in the month under review increased by 15% to 1,458,849 units, those of three-wheelers rose 37% to 97,675 units. Demand for two-wheelers 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”, Singhania said. Average inventory of two-wheelers in the channel stands at 10-15 days.
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. Demand for SUVs, along with the introduction of new models, effective marketing, consumer schemes and the auspicious wedding season, helped drive sales. Singhania informed, “However, a persistent concern lies in high inventory levels, which still hover in the 50-55-day range, posing a challenge for auto dealers.
Tractor sales saw a positive uptick after a slowdown in previous months, likely driven by anticipation of a good Rabi crop output and favourable weather conditions for wheat cultivation. Demand is likely to taper off in the commercial vehicle segment in the fourth quarter due to a high base effect and upcoming elections. Singhania said, however, long-term fundamentals remain positive, with expectations of a post-election rebound as underlying industries resume tender processes.
FADA said the ongoing marriage season,anticipated income from agricultural sales provide a positive foundation for continued consumer spending, which will support growth in the two-wheeler segment, going ahead. Additionally, better availability of vehicles and successful new model introductions across all segments hold the potential to stimulate market demand. Increased infra spends, as announced in the budget earlier this month, will boost demand for commercial vehicles post the elections. Singhania said mid to long term, the demand environment looks positive, anticipation of the upcoming elections may introduce caution amongconsumers, affecting purchasing decisions across vehicle segments. “Persistent supply bottlenecks for specific high-demand models (too) present a risk factor for consistent growth across 2W, CV and PV segments, highlighting the need for OEM (Original Equipment Manufacturer) optimisation of production lines”, he added.
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