Representational Picture
| Picture Credit score: The Hindu
The Indian auto retail sector witnessed a double digit progress of 13.84% Yr on Yr (YoY) in July 2024 backed by a strong 17.17% YoY progress in Two-Wheelers (2W) gross sales. Nonetheless, excessive stock pile-ups at dealerships have brought about ‘vital’ concern.
Throughout the month Three-Wheelers (3W) gross sales elevated by 12.88% YoY, Passenger Car (PV) rose 10.18% YoY and Business Automobiles (CV) grew 5.93% YoY. However Tractors gross sales noticed a major YoY decline of 11.95% based on gross sales numbers launched by Federation of Vehicle Sellers Associations (FADA).
“This progress is accompanied by a major concern. Stock ranges have surged to a historic excessive of 67-72 days, equating to Rs 73,000 crore price of inventory. This poses a considerable threat for supplier sustainability, necessitating excessive warning,” FADA mentioned.
FADA has urged PV OEMs to be vigilant about potential supplier failures because of these excessive stock ranges. “Additionally it is essential for the Reserve Financial institution of India to mandate monetary establishments to implement stringent checks earlier than releasing stock funding, ideally requiring supplier consent or collaterals to forestall the escalation of NPAs,” the auto sellers’ physique mentioned in a press release.
“Following a poor June, monsoons in India have intensified, leading to above-normal cumulative rainfall for July. Nonetheless, the geographical distribution was uneven. Regardless of these challenges, India’s vehicle retail sector noticed a YoY progress of 13.84%, with virtually all classes witnessing a rise,” mentioned C S Vigneshwar, Vice President, FADA.
On the close to time period outlook FADA mentioned, “The auto retail market is cautiously optimistic for the close to time period, pushed by constructive monsoon results, the festive season, and a few product introductions.”
