Automakers hope to end FY24 on a positive note, shorter waiting periods ahead

The inordinately long waiting periods for passenger vehicles may be ending as the carmakers continued to produce a record number of vehicles in February 2024, building up stock in their respective dealerships, claimed a report by LiveMint. The increasing retail demand has been playing a crucial role for the automakers to push for higher vehicle production.

The report further stated that the carmakers in India are keeping a close watch on market demand, as inventories, which have already reached 26 days, are likely to pile up in the dealerships with the OEMs having been able to cater to the pending orders and incremental sales depending solely on the pace of fresh demand.

Passenger vehicles to see lower waiting period

The report quoted India's largest carmaker Maruti Suzuki's Senior Executive Director Shashank Srivastava revealing that the Indian passenger vehicle industry expects to finish the current financial year with an 8.1 per cent growth rate at 42 lakh units.

In February 2024, the passenger vehicle segment in India recorded wholesales of 373,177 units as opposed to 335,324 units registered in February 2023, marking an 11.3 per cent year-on-year growth, Srivastava said. However, the retail numbers are lower than the wholesale figure, estimated to be around 335,900 units registered last month as compared to 301,900 units recorded in February 2023, which also registered an 11.3 per cent growth. However, the difference between wholesale and retail numbers was about 40,000 units, which have been added to the stock, revealed the Maruti Suzuki top official.

He also said that the stock level is now at 300,000 units, which is around 25-26 days of stock in the industry. "So far since July of last year, we have seen pending bookings significantly come down and stock in the channel had come down. But not only is it pretty high again, the luxury for OEMs to push wholesale against retail is not there anymore," Srivastava reportedly said, further adding, “We saw that rural growth cumulatively was at 11.7 per cent between April and February, higher than growth in urban sales at eight per cent."

SUVs driving growth in PV segment

SUVs have been driving demand and sales in the Indian passenger vehicle market, just like the rest of the global market. In February 2024 as well, SUVs accounted for more than 50 per cent of all passenger vehicle sales in India. Industry experts reportedly expect the SUV segment to contribute more than half of total passenger vehicle sales in the current financial year.

The launch of a host of new models in the last few months, and improved availability on the back of the eased supply chain have helped the automakers to post a strong growth in this segment.

Two-wheelers clock strong double-digit growth

Major two-wheeler manufacturers such as Hero MotoCorp, TVS Motor Company and Bajaj Auto have clocked a strong double-digit growth in February 2024, compared to the same month a year ago. However, registrations of two-wheelers grew at a much slower pace in February this year, at 13.2 per cent, claimed the report. This resulted in inventory addition at showrooms. The report also claimed that in the premium segment, higher demand helped Royal Enfield post a wholesale growth of a mere five per cent, whereas retail registrations shrank 1.3 per cent last month, compared to February 2023.

In the electric two-wheeler segment, sales remained flat in February 2024, reflecting a stagnation in demand. The report claimed that registrations of high-speed electric two-wheelers were up by 24 per cent on a year-on-year basis in February 2024. This was due to the extra day in February because 2024 is a leap year. However, the registrations in this category were flat last month compared to January at 81,963 units.