Auto retail sales up by 14 pc in July

New Delhi: Car sales in India saw a substantial 14 percent increase in July compared to the previous year due to the growth of rural economy, improved product availability, and introduction of new products. In addition, there was also a 7.3 per cent increase in car sales in consecutive order. There was a marginal 0.73 percent year-on-year (Y-o-Y) increase in sales in June.

The month of July saw a significant increase in the sales of two-wheelers (2W), with a growth of 17 percent. According to the Federation of Automobile Dealers Associations (FADA), passenger vehicles (PV) saw a 10 per cent year-on-year growth in July.
Nevertheless, this expansion was met with worry.

There has been a significant increase in inventory levels to a record high of 67-72 days in PVs, which is equivalent to about 73,000 crore worth of stock. This presents a significant threat to the dealer's ability to remain viable. In addition to other categories, three wheelers (3W) saw a growth of 13 per cent, while commercial vehicles saw a growth of 6 per cent. However, tractors still showed poor performance, dropping by 12 percent compared to the previous year.

Dealers reported mixed sentiments as Commercial Vehicle retail sales saw a 6 per cent year-on-year growth. Strengths of the situation included an increase in construction and mining industries, while obstacles like persistent rain, pessimistic rural market sentiment, limited financial resources, and elevated vehicle costs were also recognized. Certain sellers experienced expansion by making small bulk transactions and utilizing a wider marketing reach and product acceptance.

Vigneshwar stated that after a poor June, the monsoons in India have increased, leading to higher than usual overall rainfall in July. Nevertheless, there was an uneven distribution of rainfall across India, with Southern and Central regions receiving more rain than usual, while 10 divisions saw a significant rainfall shortage in double digits. The current weather conditions impacting crop growth.