Tractor Sales Skid 12% in July

5 Aug 2024 , 12:42 PM

India’s automotive retail sales increased 13.8% year on year in July, according to figures from auto body FADA released on Monday. Almost all segments, with the exception of tractors, had double-digit increase, even as passenger car inventory levels reached a historic high of 67 to 72 days.

The lobbying group stated that consumer sentiment remained low in some areas due to severe rainfall and economic uncertainty.

Dealers are currently under financial strain due to high inventory levels and financing rates, despite increased competition and considerable discounting in the PV business.

According to a press statement from the Federation of Automobile Dealers Association, the PV segment climbed 14% year on year, bolstered by new model introductions and pricing strategies. However, inventory levels have reached a historic high of ₹73,000 crore, indicating a “substantial risk for dealer sustainability, necessitating extreme caution.”

“FADA advises PV OEMs to be wary of potential dealer failures owing to large inventory levels. It is also critical that the Reserve Bank of India require banking institutions to conduct thorough inspections before releasing inventory funding, preferably requiring dealer approval or collaterals to minimise NPA escalation,” stated C S Vigneshwar, Vice President, FADA.

Two-wheelers increased by 17%, while three-wheelers and commercial vehicles expanded by 13% and 6%, respectively. Tractors underperformed other segments despite above-average cumulative rainfall with variable geographical distribution, resulting in different impacts across regions.

FADA is ‘cautiously positive’ about dealer sentiment in the near term, citing fresh product releases amid concerns about low client enquiries and the probable impact of heavy rains.

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