PV Retail Sales Improve By 13% YoY In July 2024: Icra

Driven by the introduction of new models and discounts from the original equipment manufacturers, the retail sales of passenger vehicles reported a 13 per cent year-on-year (YoY) in July 2024. The retail sales improved by 14 per cent in July 2024 on a sequential basis on June’s lower base which was impacted by the extreme heat conditions, as per the report by Icra. The inventory levels rose to an all-time high.

Icra reported that even though the domestic wholesale volumes reported moderation on a YoY basis, they were steady at 3.4 lakh units in July 2024. The 1 per cent sequential growth in volumes was led by the steady supplies from the original equipment manufacturers.

As per the Federation of Automobile Dealers Association (FADA), the inventory levels at the end of July 2024 rose to an all-time high of 67 to 72 days (approx. Rs 73,000 crore). This has been attributed to the steady production and the slowdown reported in retail sales over the past few months.

PV volumes are driven by the Utility Vehicles (UVs), as they continue to be the most preferred segment by driving 63 to 64 per cent of the overall PV volumes. Icra expects the trend to remain unchanged in the near term.

However, the export volumes reported moderation by 19 per cent on a sequential basis. On the other hand, they reported a 4 per cent growth on a YoY basis. Icra stated that the inflationary pressures and the issues of forex availability in some African markets may hit the demand.

After registering a growth of 8 per cent YoY in FY24, the industry is set to grow by 3 to 6 per cent in the current financial year, as per Icra. This moderation in growth has been attributed to the high base by the ratings agency.