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The robust signals from the rural sector, coupled with increased demand for premium and entry-level segments, are set to bolster the two-wheeler (2W) market in March, an industry body said on Thursday.
Similarly, both the three-wheeler (3W) and commercial vehicle (CV) sectors anticipate a boost in sales, driven by the financial year-end rush and an infusion of funds into the market, which is expected to stimulate purchases, Federation of Automobile Dealers Associations (FADA) said in its monthly report.
In the passenger vehicle (PV) segment, the confluence of financial year-end buying incentives, improved vehicle availability, and seasonal factors such as marriages is likely to propel demand, it said.
“However, the anticipation of elections casts a shadow over this positive scenario, with potential deferred purchases across segments. The commercial vehicle sector, in particular, might face a cautious approach from customers waiting for the outcome of general elections. Supply constraints further complicate the landscape, especially in the PV segment, where the availability of popular variants remain a concern,” Manish Raj Singhania, President, FADA said in the monthly report.
External factors like crop failures in rural areas could also dampen market sentiment and financial liquidity, posing additional hurdles to sustained growth, he said, adding that overall, the near-term outlook for March 2024 in the auto retail sector is one of cautious optimism.
“Financial year-end activities traditionally spur purchasing across segments, yet the feedback from dealers highlights the nuanced challenges of inventory management, extremely aggressive target settings and evolving consumer preferences. Manufacturers’ ability to address these challenges through strategic product introductions, supportive dealer policies and adaptive sales strategies will be paramount in maintaining the sector’s growth momentum and achieving success in in the near term,” Singhania added.
FADA informed that as of February-end, average inventory for PVs ranged from 50-55 days and it was 10-15 days for 2W.
Retail sales
On monthly retail sales, FADA reported that the PV segment grew12.36 per cent year-on-year (y-o-y), marking the highest February sales figures ever, driven by new product introductions and enhanced vehicle availability. The PV sales grew at 3,30,107 units in February, compared with 2,93,803 units in the corresponding month last year.
The 2W retail sales also grew 13.25 per cent y-o-y to 14,39,523 units during the month (12,71,073 units).
The retail sales of 3W grew 24 per cent y-o-y to 94,918 units last month (76,619 units).
Tractor sales also grew 11 per cent y-o-y to 76,626 units during the month (69,034 units).
Retail sales of CV grew around 5 per cent y-o-y to 88,367 units in February (84,337 units).
The grand total of all categories grew 13 per cent y-o-y to 20,29,541 units in February (17,94,866 units), the FADA monthly report indicated.
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