Auto sales up 9% in August, PV inventory at an all-time high: FADA

Adopting a cautious stance for the near-term outlook, FADA said that low rainfall may impact rural auto demand during the upcoming festive season

India recorded a 9 per cent growth in the automotive retail sector in August, data released by the Federation of Automobile Dealers Associations (FADA) on Tuesday showed. Compared to the pre-pandemic numbers, the growth was at a moderate 1 per cent.

As compared to July, the auto sales in the country were 3 per cent higher.

The jump in sales was mainly led by three-wheeler sales, which reached a historic high in August. A total of 99,907 units of three-wheelers were registered in August, 66 per cent higher than August 2022 and 6 per cent higher than July 2023.

On a year-on-year (y-o-y) basis, all the segments recorded a jump in sales. Two-wheeler sales were up 6 per cent, passenger vehicle sales rose 6.5 per cent, tractor numbers were up 14 per cent, and commercial vehicle sales were up 3 per cent.

As compared to July, all sectors witnessed growth except tractors, which saw a contraction of 19 per cent.

In the PV segment, however, inventory levels surpassed the 60-day threshold, establishing an all-time high even before the onset of the 42-day festive period.

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"It is alarming that inventory levels have exceeded a 60-day supply for the first time, even before the onset of the Navratri-Diwali festivities—a trend that necessitates vigilant monitoring by PV OEMs," said Manish Raj Singhania, president of FADA.

"In the PV arena, improved vehicle supply, bolstered by expanded customer schemes, has maintained positive market dynamics. Despite such advances, supply chain bottlenecks persist, particularly in timely deliveries," Singhania added.

He also said that the market has responded favourably to the introduction of new hybrid and CNG models, "but a constrained product range in popular segments, such as mid-size SUVs, continues to limit overall potential".

Adopting a cautious stance for the near-term outlook, FADA said that low rainfall may impact rural demand during the upcoming festive season.

"Although the dealership network is buoyed by optimistic sentiment, FADA adopts a cautious stance, in view of the suboptimal rainfall which could potentially affect the forthcoming festive season," it said.

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