FADA Releases February’24 Vehicle Retail Data

• Overall Growth in Feb’24: Indian Auto Retail experienced a robust 13% YoY growth in Feb’24 across all vehicle categories. 2W, 3W, PV, Tractors and CV sectors registered growth rates of 13%, 24%, 12%, 11% and 5% respectively.
• 2W Market Drivers: 2W market growth of 13% YoY was notably driven by the rural sector, demand for premium models and strong performance of entry-level segments.
• 3W Market Surge: The 3W market saw a significant 24% YoY increase, with EVs constituting 53% of this growth, highlighting a shift towards Electric E-Rickshaws and an increase in first-time users.
• Record-Breaking PV Sales & Inventory Concern: PV segment recorded a 12% 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 OEMs to adjust production to reduce dealer carrying costs.
• CV Sector Resilience: The CV sector achieved a 5% YoY growth, overcoming challenges such as cash flow shortages and election-related purchase deferrals.
• Cautious Optimism for Near Term: Near-term outlook for March 2024 suggests cautious optimism, with potential growth driven by robust signals from the rural market and financial year-end buying activities.
• Election Related Challenges: Challenges include anticipation of elections potentially deferring purchases, supply constraints and external factors like crop failures impacting market sentiment.

7^th March’24, New Delhi, BHARAT: The Federation of Automobile Dealers Associations (FADA) today released Vehicle Retail Data for Feb’24.

February’24 Retails

In February 2024, Indian Auto Retail saw a robust overall growth of 13% YoY, as noted by FADA President, Mr. Manish Raj Singhania. Every vehicle category, including 2W, 3W, PV, Tractors, and CV, registered growth rates of 13%, 24%, 12%, 11%, and 5% respectively.

“The 2W market’s 13% YoY growth was driven by the rural sector, premium model demand, and strong entry-level segment performance, with broader product availability and compelling offers enhancing product acceptance. Factors like favourable marriage dates and improved economic conditions also contributed to this positive growth.

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

The PV segment has exhibited an impressive 12% YoY growth, achieving the highest sales figures ever recorded for the month of February. This upward trajectory was propelled by the strategic introduction of new products and enhanced vehicle availability. While the sector benefits from favourable customer sentiment and the successful introduction of models in high demand, the persistently elevated inventory levels, remaining at 50-55 days, present a significant concern. It is imperative for PV OEMs to undertake adjustments in production to mitigate these high inventory levels, thereby reducing the financial burden of carrying costs on dealers as it is vital for maintaining the financial health of dealers. Adopting this forward-looking stance is essential for ensuring the sustained growth and vitality of this segment.

The CV segment grew by 5% YoY, overcoming challenges through fleet purchases and school buses, strong sectoral demand and improved financing, despite obstacles like cash flow shortages and election-related purchase deferrals, highlighting the sector’s resilience and gradual recovery.“

Near-Term Outlook

For the near term outlook, the auto retail sector is influenced by a blend of positive trends and challenges. The rural sector’s robust signals, along with an increased demand for premium and entry-level segments, are set to bolster the 2W market. Similarly, both the 3W and CV sectors anticipate a boost in sales, driven by the financial year-end rush and an infusion of funds into the market, which is expected to stimulate purchases. In the PV sector, the confluence of financial year-end buying incentives, improved availability of vehicles and seasonal factors such as marriages is likely to propel demand.

However, 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 remain a concern. External factors like crop failures in rural areas could also dampen market sentiment and financial liquidity, posing additional hurdles to sustained growth.

Overall, the near-term outlook for March 2024 in the auto retail sector is one of cautious optimism. Financial year-end activities traditionally spur purchasing across segments, yet the feedback from dealers highlights the nuanced challenges of inventory management, extremely aggressive target settings and evolving consumer preferences. OEMs’ ability to address these challenges through strategic product introductions, supportive dealer policies and adaptive sales strategies will be paramount in maintaining the sector’s growth momentum and achieving success in in the near term.

Key Findings from our Online Members Survey

• Inventory at the end of Feb’24

• • Average inventory for Passenger Vehicles ranges from 50-55 days
  • Average inventory for Two – Wheelers ranges from 10-15 days

• Liquidity

• • Neutral               49.80%
  • Good                 32.81%
  • Bad                      17.39%

• Sentiment

• • Neutral              43.48%
  • Good                   36.36%
  • Bad                      20.16%

• Expectation from Mar’24

• • Growth               56.13%
  • Flat                      35.97%
  • De-growth         07.91%

Chart showing Vehicle Retail Data for Feb’24

All India Vehicle Retail Data for Feb’24

CATEGORY	FEB’24	FEB’23	YoY %	JAN’24	MoM%
2W	14,39,523	12,71,073	13.25%	14,58,849	-1.32%
3W	94,918	76,619	23.88%	97,675	-2.82%
E-RICKSHAW(P)	36,579	30,736	19.01%	40,526	-9.74%
E-RICKSHAW WITH CART (G)	4,435	2,446	81.32%	3,739	18.61%
THREE-WHEELER (GOODS)	10,768	8,305	29.66%	10,163	5.95%
THREE-WHEELER (PASSENGER)	43,065	35,076	22.78%	43,188	-0.28%
THREE-WHEELER (PERSONAL)	71	56	26.79%	59	20.34%
PV	3,30,107	2,93,803	12.36%	3,93,250	-16.06%
TRAC	76,626	69,034	11.00%	88,671	-13.58%
CV	88,367	84,337	4.78%	89,208	-0.94%
LCV	48,594	47,551	2.19%	49,835	-2.49%
MCV	6,454	5,001	29.05%	5,454	18.34%
HCV	28,271	28,359	-0.31%	29,179	-3.11%
Others	5,048	3,426	47.34%	4,740	6.50%
Total	20,29,541	17,94,866	13.07%	21,27,653	-4.61%

Source: FADA Research

Disclaimer:

1. The above numbers do not have figures from TS & LD.
2. Vehicle Retail Data has been collated as on 06.03.24 in collaboration with Ministry of Road Transport & Highways, Government of India and has been gathered from 1,358 out of 1,445 RTOs.
3. Commercial Vehicle is subdivided in the following manner
   1. LCV – Light Commercial Vehicle (incl. Passenger & Goods Vehicle)
   2. MCV – Medium Commercial Vehicle (incl. Passenger & Goods Vehicle)
   3. HCV – Heavy Commercial Vehicle (incl. Passenger & Goods Vehicle)
   4. Others – Construction Equipment Vehicles and others
4. 3-Wheeler is sub-divided in the following manner
   1. E-Rickshaw – Passenger
   2. E-Rickshaw – Goods
   3. 3-Wheeler – Goods
   4. 3-Wheeler – Passenger
   5. 3-Wheeler – Personal