The passenger vehicle (PV) sales in the near term are expected to have a mixed trend as the festive season, attractive schemes and good monsoon are expected to boost sales, but concerns over low consumer sentiment, heavy rainfall and a lack of new product launches still persist.
High inventory levels also pose a significant risk, and it is crucial for PV manufacturers to avoid further increases in stock to prevent financial strain on dealers. PV segment inventory surged to historic highs of 67-72 days, amounting to ₹73,000 crore worth of stock in July, thus posing risks for dealer sustainability, FADA said.
Dealers continue to face financial pressure due to high inventory and interest costs and there is an increased competition and heavy discounting in the PV segment, it said.
However, two-wheeler (2W) sales are expected to be buoyed by factors such as a growing rural economy, positive monsoon impacts and the introduction of new products.
“The festive season beginning after the Aadi festival and favourable agricultural conditions are also likely to contribute to increased sales. However, heavy rainfall, ongoing agricultural activities and inconsistent monsoon patterns may dampen demand in certain areas,” C S Vigneshwar, Vice President, FADA, said on Monday.
Sharing the monthly retail sales report, he said commercial vehicles (CVs) face a modest outlook, with positive factors including improved market reach and the festive season, tempered by challenges such as bad freight rates and ongoing rainfall.
In terms of monthly retail sales, FADA reported that PV sales grew by 10.18 per cent year-on-year (YoY) to 3,20,129 units, compared with 2,90,564 units in the corresponding month last year, driven by new model launches and attractive pricing strategies.
Similarly, 2W sales grew by 17.17 per cent YoY to 14,43,463 units during the month as against 12,31,930 units in July 2023, due to a thriving rural economy, positive monsoon effects, and government support programmes enhancing rural incomes.
“The introduction of new products and better stock availability also contributed significantly, despite market slowdowns in certain regions, excessive rains, and increased competition. The segment also saw an increase in EV sales due to discounts and Electric Mobility Promotion Scheme (EMPS) deadline,” Vigneshwar said.
Three-wheeler (3W) sales also grew by 13 per cent YoY to 1,10,497 units during the month as compared with 97,891 units in the corresponding month last year. CV sales grew by six per cent YoY to 80,057 units in July as compared with 75,573 units in the same month previous year, FADA reported.
However, tractor sales declined by 12 per cent YoY to 79,970 units in July as against 90,821 units in July 2023.
The grand total of all segments grew by 14 per cent YoY to 20,34,116 units in July as compared with 17,86,779 units in the same month last year, FADA reported.
