FADA releases January’24 Vehicle Retail Data

Mumbai, February 13, 2024: The Federation of Automobile Dealers Associations (FADA) today released Vehicle Retail Data for Jan'24.

Highlights: 
    Industry-Wide Growth: January 2024 saw strong growth across all vehicle categories, with the overall auto retail market expanding by 15%. Two-wheelers (2W) led the charge with 15% growth, followed by three-wheelers (3W) at 37%, passenger vehicles (PV) at 13%, tractors (Trac) at 21% and commercial vehicles (CV) at a modest 0.1%.
    2W Demand Stays Strong: Demand for 2Ws 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.
    PV Sales Smash Record: 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. 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 Rebound: 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.
    Cautious Optimism for CVs: The commercial vehicle segment might experience a slight demand taper in the fourth quarter due to a high base effect and upcoming elections. However, long-term fundamentals remain positive, with expectations of a post-election rebound as underlying industries resume tender processes.
    Potential for Further Growth: The government's optimistic crop production estimates and continued support measures are expected to boost the rural economy, potentially leading to even higher tractor demand and increased sales of entry-level 2Ws in rural areas.

Commenting on January’24 Auto Retails, FADA President, Manish Raj Singhania said, “January 2024 began on a promising note for the calendar year, demonstrating 15% overall retail growth compared to the previous year. All vehicle categories – 2W, 3W, PV, Tractors, and CV – achieved positive YoY growth of 15%, 37%, 13%, 21%, and 0.1% respectively.
 
Several positive trends in the 2W market signalled a robust start to the year. Improved vehicle availability, due to adjustments post-OBD 2 norm implementation, the introduction of new models and a shift towards premium options all contributed to increased demand. This, combined with a good harvest, a positive marriage season and effective follow-ups and offers, indicate a favourable trajectory for the 2W sector. Furthermore, despite supply shortages, increased interest in electric vehicles highlights evolving consumer preferences within this segment.
 
The 3W sector revealed a mixed landscape. While growth and optimism continue within the commercial 3W market, intensified competition from electric models underscores a significant market shift – now 55% electrified.
 
January 2024 presented a complex scenario for the CV segment, demonstrating limited YoY growth. On one hand, increased infrastructure development, port activity and positive crop yields fuelled certain market segments. However, this momentum was hindered by extreme weather, tightened liquidity, high vehicle costs and more restricted financing.
 
A record-breaking month, the PV segment achieved all-time high retail sales of 3,93,250 units and impressive 13% YoY growth. SUV demand, along with the introduction of new models, greater availability, effective marketing, consumer schemes and the auspicious wedding season, underpinned this strong performance.
 
However, despite this achievement, serious concerns remain regarding PV inventory levels, now in the 50-55 day range. This calls for immediate recalibration of production from OEMs to better align with actual market demand and avoid future oversupply issues. As adaptability is crucial in this dynamic industry, OEMs must balance innovation with strategic production planning to ensure sustained success and overall market stability."