Auto sales rising at 10% clip

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Auto retail sales in July maintained a steady 10% year on year growth, like in June. All vehicle categories recorded growth with two-wheelers growing 8%, 3-wheelers 74%, passenger vehicles 4%, tractors 21% and commercial vehicles 2%, according to he Federation of Automobile Dealers Associations (FADA).

Total retail sales across segments rose to 17,70,181 units last month, as compared to 16,09,217 units in July 2022. Passenger vehicle sales saw an increase of 4 per cent to 2,84,064 units last month, as compared to 2,73,055 units in the year-ago period, the Federation of Automobile Dealers Associations (FADA) said in a statement. But the monthly analysis presents a decline of 5% in retail sales from June 2023. The only exception was the 3W segment, which grew by 9%, while categories like 2W, PV and tractors registered decline of 6%, 4% and  8%, respectively. The commercial vehicle sales were flat at -0.2%.

When compared to pre-covid levels, overall retail sales showed a 13% decline. The 2W segment grappled with a significant 23% dip, while CVs also underperformed with a 4% contraction. The inventory for Passenger Vehicles has surpassed the 50-day mark and currently hovers between 50-55 days, suggesting an inventory build-up in anticipation of the forthcoming festive season.

The rural demand has been lagging for some time and the Indian Meteorological Department’s below-normal rainfall rain forecast raises potential apprehensions regarding reduced yields of kharif crops, which could potentially dampen the immediate resurgence of rural demand.

While caution remains the operative word in the short term, FADA is hopeful about retail growth prospects, especially with the festive season on the horizon. FADA, which represents over 15,000 automobile dealers, said it remains cautious in terms of business outlook going ahead.