December Sales Surge
India’s auto retail market ended 2023 on a high note, with December sales jumping 21% year-on-year to 1.99 million units. This follows a strong 2023 overall, with sales up 11% to 23.87 million units compared to 2022.
Segment Breakdown
- Two-wheelers led the charge, growing 28% thanks to factors like favorable weather, wider model options, and increased purchasing power among farmers.
- Three-wheelers saw an impressive 36% surge, while passenger vehicles (PVs) witnessed a more modest 3% increase.
- Tractors and commercial vehicles (CVs) also experienced positive growth, albeit at 0.2% and 1.3% respectively.
Positive Full-Year Performance
All vehicle segments enjoyed a positive year in 2023:
- Two-wheelers: +9.5%
- Three-wheelers: +58.5%
- PVs: +11%
- Tractors: +7%
- CVs: +8%
Key Drivers
FADA President Manish Raj Singhania attributes the robust growth to several factors
- Favorable market sentiment.
- Wide range of new models and variants.
- Lucrative financing options.
- Increased demand for SUVs.
- Anticipation of price hikes in January 2024.
- Improved rural liquidity and crop sale benefits.
Inventory Concerns
Despite the positive sales figures, high inventory levels remain a major concern, particularly for PVs, where average stock ranges from 55-58 days.
Industry Outlook
FADA anticipates a short-term slowdown during the Kharmas period (December 16 – January 15) but remains cautiously optimistic for the near term. New model launches and effective inventory management are crucial for sustained growth.
In Conclusion
India’s auto retail sector displayed resilience and growth in 2023, but managing high inventory levels will be key to navigating dynamic market conditions in the coming months.
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