Passenger vehicles have a record-breaking January, auto retail sales up 15%

Retail sales of automobiles in January 2024 witnessed a 15 per cent increase to 2.13 million units, compared to 1.85 million units during the corresponding period in 2023.

This growth was observed across all vehicle categories, including two-wheelers, three-wheelers, passenger vehicles, tractors, and commercial vehicles, which reported increases of 15 per cent, 37 per cent, 13 per cent, 21 per cent, and 0.1 per cent, respectively, according to data shared by the Federation of Automobile Dealers Associations (FADA).

January 2024 marked a record-breaking month for the passenger vehicle (PV) segment, achieving an all-time high in retail sales of 393,250 units, a 13 per cent rise from 347,086 units in January 2023, surpassing the previous record set in November 2023. The strong performance was supported by SUV demand, the introduction of new models, greater availability, effective marketing, consumer schemes, and the auspicious wedding season.

However, concerns persist regarding PV inventory levels, which are now within the 50-55 day range. "This calls for immediate recalibration of production from original equipment manufacturers to better align with actual market demand and prevent future oversupply issues. In this dynamic industry, adaptability is crucial. OEMs must balance innovation with strategic production planning to ensure sustained success and overall market stability," stated Manish Raj Singhania, president of FADA.

The two-wheeler market began the year positively, with improved vehicle availability following adjustments post-Onboard Diagnostic 2 (OBD 2) norm implementation, the introduction of new models, and a shift towards premium options, all contributing to increased demand. This, coupled with a good harvest, a positive marriage season, and effective follow-ups and offers, suggests a favourable outlook for the two-wheeler sector. Two-wheeler sales reached 1.46 million units, up from 1.27 million units in the same month the previous year.

"The three-wheeler sector presented a mixed picture. While growth and optimism persist in the commercial three-wheeler market, the intensified competition from electric models highlights a significant market shift, now with 55 per cent electrification," he added. The segment experienced a 37 per cent increase to 97,675 units, up from 71,325 units in January 2023.

January 2024 also depicted a complex scenario for the commercial vehicle (CV) segment, showing limited year-on-year growth. "On one hand, increased infrastructure development, port activity, and positive crop yields boosted certain market segments.
However, this momentum was offset by extreme weather conditions, tightened liquidity, high vehicle costs, and more restricted financing options," Singhania noted. Retail sales in the CV sector were 89,208 units during the month, slightly up from 89,106 units the previous year.