Vehicle Registrations Surge Ahead of Festive Season
Last month, vehicle registrations, considered a key indicator of retail sales, experienced a significant rise of 9%. A total of 1,818,647 units were registered, reflecting the strong customer demand in anticipation of the upcoming festive season. The Federation of Automobile Dealers Association (FADA) is cautiously optimistic about sustaining this momentum due to the launch of new vehicles and positive signs of recovery in rural markets. However, FADA warns of potential risks, specifically the impact of insufficient monsoon rains on inflation and overall consumer demand.
According to data compiled by FADA, passenger vehicle registrations increased by 6.53% compared to the previous year, reaching 315,153 units. Two-wheelers also saw a growth of 6.29% with a total of 1,254,444 units registered, while commercial vehicles experienced a modest rise of 3.23% with 75,294 units registered.
Manish Raj Singhania, the President of FADA, expressed satisfaction with the steady growth in vehicle registrations across all segments when compared to the previous year. He emphasized the positive recovery in the auto retail sector, with a modest improvement of 0.8% compared to pre-Covid benchmarks, largely driven by the impressive rebound of two-wheelers.
In spite of the increase in two-wheeler sales last month, consumer sentiments remained uncertain, leading to lower conversion rates and intensified competition among major players. Currently, there is an inventory of two-wheelers that amounts to 23-25 days.
In the passenger vehicle segment, the positive demand momentum was sustained by the improvement in supplies and promotional schemes offered by carmakers. Despite these advancements, there are still persistent supply chain bottlenecks, particularly in terms of timely deliveries. The market has responded well to the introduction of new hybrid and CNG models. However, the limited product range in popular segments like mid-size SUVs continues to constrain the overall potential,” Singhania explained. The current inventory of passenger vehicles ranges from 58-63 days.
Singhania expressed concern over the inventory levels, which have exceeded a 60-day supply for the first time, even before the commencement of the Navratri-Diwali festivities. This trend highlights the need for PV Original Equipment Manufacturers (OEMs) to closely monitor the situation. In the commercial vehicle segment, despite challenges such as slow cargo movement, there has been strong demand in verticals such as cement, iron ore, and coal.
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