📷 Image Credits: Moneycontrol
In June 2024, automobile retail sales in India remained flat with a minor increase of 0.73 percent compared to the same period last year, totaling to 18,95,552 units, according to data released by the Federation of Automobile Dealers Associations (FADA) on July 5. Passenger vehicle sales, two and three-wheelers, and tractors contributed to this subdued growth. FADA President Manish Raj Singhania highlighted that June is typically a weak month for auto retail in India. While PV wholesales increased by 3.67 percent to 3.40 lakh units, retail sales decreased by 6.77 percent to 2,81,566 units compared to the previous year. The scorching temperatures and multiple election phases deterred consumers from visiting showrooms, leading to a drop in retail sales. Despite efforts to boost demand through discounts and improved product availability, high inventory levels of cars continued to be a concern, reaching an all-time high of 62 to 67 days.
The extreme heatwave, delayed monsoons, and election-related market slowdowns significantly impacted rural sales, resulting in a 15 percent decrease in walk-ins and postponed purchase decisions. Two-wheeler registrations saw a 5 percent year-on-year increase to 13,75,889 units, with 13 percent less walk-ins due to extreme heat. Commercial vehicle sales declined by 5 percent to 72,747 units, while three-wheeler registrations rose by 5 percent to 94,321 units. Tractor sales, however, plummeted by 28 percent to 71,029 units.
FADA remains cautiously optimistic about the industry’s outlook, anticipating improved disposable incomes in rural India due to the government’s increase in minimum support prices for kharif crops. Despite expectations of better sales with improved supply and new product launches, concerns over low customer inquiries and market sentiment persist. The PV segment faces inventory challenges and low market sentiment, while the CV sector anticipates growth from infrastructure projects and seasonal demand. Overall, the industry anticipates tempered growth amid existing challenges in July.