Indian Auto Retail Sales Surge 13% in Feb Led By Robust Demand

In February, passenger vehicles witnessed an unprecedented performance, achieving a 12 per cent increase in sales to 330,107 units, compared to 293,803 units in the same period last year

Automobile retail sales in India surged by 13 per cent in February, reaching 2.03 million units compared to 1.79 million units in February 2023, reveals the data from the Federation of Automobile Dealers Associations (FADA). This growth was driven by increased vehicle availability, improved demand due to favourable economic conditions, and the impact of the marriage season. However, the sector anticipates that the upcoming Lok Sabha elections may adversely affect sales, as potential deferred purchases are expected across segments.

In February, passenger vehicles (PVs) witnessed an unprecedented performance, achieving a 12 per cent increase in sales to 330,107 units, compared to 293,803 units in the same period last year. Additionally, every other vehicle category, such as two-wheelers, three-wheelers, tractors, and commercial vehicles, experienced growth rates of 13 per cent, 24 per cent, 11 per cent, and 5 per cent, respectively.

The growth in the two-wheeler sector was primarily driven by increased demand from the rural sector, a rise in demand for premium models, and firm performance in the entry-level segment. The broader availability of products and attractive offers further bolstered product acceptance. Additionally, favourable marriage dates and improved economic conditions also played a significant role in this positive growth. In the month under review, two-wheeler sales reached 1.43 million units, compared to 1.27 million units during the same period in the previous financial year.

Manish Raj Singhania, president of FADA, said, "The PV segment recorded a 12 per cent YoY growth, marking the highest February sales figures ever, driven by new product introductions and enhanced vehicle availability. Elevated inventory levels in the PV segment, remaining at 50-55 days, pose a significant concern, necessitating original equipment manufacturers to adjust production to reduce dealer carrying costs.”

"The 3W market surged by 24 per cent, with EVs making up 53 per cent of this growth, fuelled by first-time users and a shift towards Electric E-Rickshaws, alongside better market sentiment and consumer engagement,” Singhania added. 

In February, sales of three-wheelers reached 94,918 units, marking an increase from 76,619 units recorded in February 2023.

The commercial vehicle segment demonstrated a 5 per cent growth, navigating challenges such as cash flow shortages and election-related purchase deferrals. Despite these obstacles, the segment displayed resilience and a gradual recovery, driven by fleet purchases, school buses, strong sectoral demand, and improved financing. Sales for the segment reached 88,367 units during the month, up from 84,337 units recorded during the same period last year.

"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 remains a concern. External factors like crop failures in rural areas could also dampen market sentiment and financial liquidity, posing additional hurdles to sustained growth,” Singhania concluded.