homeauto NewsIndia sells record 3.93 lakh cars in January, two wheeler demand steady on rural boost: FADA
India sells record 3.93 lakh cars in January, two-wheeler demand steady on rural boost: FADA
Improved vehicle availability, introduction of new models and a shift towards premium options combined with a good harvest, a positive marriage season and effective follow-ups and offers, indicate a favourable trajectory for the two-wheeler sector, FADA said.
India’s auto retail market witnessed robust expansion in January 2024, with significant growth across all vehicle categories, according to data released by the Federation of Automobile Dealers Associations (FADA) on February 13. The overall market saw a 15% increase in activity, spearheaded by two-wheelers which led the charge with a 15% surge.
Following closely behind were three-wheelers at an impressive 37%, passenger vehicles at 13%, tractors (Trac) at 21%, and commercial vehicles at a modest 0.1%.
According to the auto retailers’ body, demand for two-wheelers remains steady on the back of 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, it said.
“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,” the report said.
It added that this, combined with a good harvest, a positive marriage season and effective follow-ups and offers, indicates a favourable trajectory for the two-wheeler sector. Furthermore, despite supply shortages, increased interest in electric vehicles highlights evolving consumer preferences within this segment,” the report said.
Meanwhile, the passenger vehicle or cars segment achieved a new all-time high in January, retailing 3,93,250 vehicles (13% year-on-year growth) 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,” FADA report said.
The three-wheeler sector witnessed a mixed landscape. FADA highlighted that while growth and optimism continue within the commercial three-wheeler market, intensified competition from electric models underscores a significant market shift – now 55% electrified.
According to auto dealers, January 2024 presented a complex scenario for the commercial vehicles 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.
Reflecting on the outlook for February, FADA said the ongoing marriage season, anticipated income from agricultural sales along with new launch momentum provide a positive foundation for continued consumer spending. Also, post-Union Budget policies are expected to drive growth in the CV sector, particularly within infrastructure-related industries, it said.
However, challenges including market uncertainty, supply constraints, finance and liquidity continue to persist.
First Published: Feb 13, 2024 11:16 AM IST
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