India’s retail car sales increased 13% year over year in February

As compared to 1.79 million units in February 2023, India’s retail car sales increased by 13% in February to 2.03 million units, according to figures issued by the Federation of Automobile Dealers Associations (FADA).

The influence of marriage season, better demand brought on by the state of the economy, and increased car availability are the main causes of the spike.

Sales of passenger vehicles (PVs) increased by 12% to 330,107 units in February of this year, surpassing the 293,803 units sold in the same month the previous year.

Other categories showed growth rates of 13%, 24%, 11%, and 5%, respectively, including two-wheelers, three-wheelers, tractors, and commercial vehicles.

The desire for premium models, good entry-level segment performance, and the rural market all contributed to the two-wheeler sector’s development. Broader product availability and alluring incentives also helped to increase product adoption.

According to the research, this good development was also attributed to favorable marriage dates and improving economic situations. Two-wheeler sales for the month under review were 1.43 million, down from 1.27 million in the same time of the previous fiscal year.

However, because of possible postponed purchases across categories, the industry anticipates that the impending Lok Sabha elections would be a spoiler for sales.

“The PV segment recorded a 12% YoY growth, marking the highest February sales figures ever,” said FADA President Manish Raj Singhania. “This growth was driven by new product introductions and enhanced vehicle availability.” High PV sector inventory levels, which are still above 50–55 days, are a major cause for worry. As a result, OEMs must modify production in order to lower dealer carrying costs.

The data indicates that the commercial vehicle segment experienced a 5% growth, despite various challenges such as cash flow shortages and election-related purchase deferrals. The sector overcame these issues by acquiring school buses and fleet vehicles, improving financing, and strong sectoral demand.

Sales for the sector were 88,367 units in the month compared to 84,337 units in the same time the previous year.