PV sales rise 10% in July on new launches: FADA

New Delhi: Passenger vehicle retail sales in India witnessed a 10 per cent on-year jump in July driven by new model launches and enhanced discounts, industry body FADA said on Monday.

Total passenger vehicle retail sales rose to 3,20,129 units in July, as compared to 2,90,564 units in July 2023. “Dealers reported benefits from good product availability, attractive schemes, and a wider range of products,” the Federation of Automobile Dealers Associations (FADA) Vice President C S Vigneshwar said in a statement. Heavy rains, low consumer sentiment, and intense competition posed challenges but dealers managed to sustain sales through strong promotions and incremental discounts, he added. Vigneshwar, however, noted that the growth is accompanied by high inventory levels which has surged to a historic high of 67-72 days, equating to Rs 73,000 crores worth of stock. “This poses a substantial risk for dealer sustainability, necessitating extreme caution.

FADA urges PV original equipment manufacturers (OEMs) to be vigilant about potential dealer failures due to these high inventory levels,” he stated. It is also crucial for the Reserve Bank of India to mandate financial institutions to implement stringent checks before releasing inventory funding, preferably requiring dealer consent or collaterals to prevent the escalation of NPAs, he added. Two-wheeler retail sales last month stood at 14,43,463 units, an increase of 17 per cent over 12,31,930 units in July 2023. The segment experienced notable growth due to a thriving rural economy, positive monsoon effects, and the government’s support programs enhancing rural incomes, Vigneshwar oted. “The introduction of new products and better stock availability also contributed significantly, despite market slowdowns in certain regions, excessive rains, and increased competition,” he added. Commercial vehicle retail sales grew 7 per cent year-on-year to 80,057 units last month.