Summary:

In July 2024, Indian automotive retail sales rose 14% year-on-year, driven by a strong rural economy, improved product availability, and new product releases. Two-wheeler sales increased by 17% due to the robust rural economy, favorable monsoon conditions, and government support. Passenger vehicle (PV) sales rose by 10%, aided by new models and competitive pricing. However, concerns were raised about high inventory levels of 67-72 days in PVs, which pose a risk to dealer sustainability. Despite these issues, dealers continued to drive sales through heavy marketing and discounts.

The Federation of Automobile Dealers Associations (FADA) emphasized the need for PV OEMs to remain vigilant due to large inventory levels and potential dealer failures. They also stressed the importance of financial institutions conducting thorough inspections before issuing inventory finance to avoid non-performing assets (NPAs). Commercial vehicle sales increased by 6%, driven by growth in the construction and mining industries, despite challenges such as persistent rainfall and limited financing availability. Uneven monsoon rainfall in July led to a 2.4% decrease in kharif sowing compared to July 2023, due to El Niño disturbances.

Source: IBEF 

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