July Retail Auto Sales Up 14%, FADA warns of inventory build-up

5 Aug 2024 , 10:14 AM

India’s overall retail automobile sales grew 13.8% on year to 2.034 million vehicles in July, primarily driven by growth in two-wheelers, according to the Federation of Automobile Dealers Associations.

Two-wheeler sales rose 17.2% on year to 1.443 million on the back of good southwest monsoon rains. The introduction of new products and better stock availability also contributed significantly, the federation said.

Passenger vehicle sales grew 10.2% on year to 320,129 vehicles in July after contracting on year in the previous two months.

Passenger vehicle sales in July were driven by new model launches and attractive pricing strategies, the federation said. However, this growth is accompanied by concerns about surging inventory levels, it said.

Inventory levels have risen to 67-72 days, equating to ₹730 billion of stock, posing risk for dealer sustainability, the federation said.

Commercial vehicle sales rose 5.9% on year 80,057 units in July.

The near-term outlook for two-wheeler sales is buoyed by growing rural economy, positive monsoon impacts and introduction of new products. The outlook for passenger vehicles is mixed with concerns over low consumer sentiment amid festive season, the federation said.