FADA Anticipates Recovery In Commercial Vehicle Sales
The recent year has seen very little growth in the commercial vehicle (CV) segment—just 0.7%—due to protracted elections, floods, and droughts that have affected different areas, some of which have faced many difficulties in a single month. Further impeding development has been the government’s delayed infrastructure funding. The Federation of Automobile Dealers Associations (FADA) anticipates more government spending this quarter, which might boost CV sales and have a knock-on effect for passenger cars (PV) and two-wheelers. Positive indicators, such noteworthy dealership agreements, also point to better profitability in the next quarter.
FADA also brought attention to dealership inventory levels, pointing out notable gains over only a few months ago. Better retail sales over the last four months and OEMs’ deliberate efforts to control shipments have helped inventories drop from roughly 90 days of stock to about 55 days. Dealers and OEMs have a common goal of cutting surplus inventory and keeping inventory levels in check, and this decrease fits that goal.
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FADA highlighted the expanding importance of electric vehicles (EVs), which presently make up around 6% of the market, while discussing the two-wheeler category. Even though EV adoption is still in its infancy, there has been a noticeable trend toward EVs in the scooter sector. Additionally, to satisfy consumer demands, new competitors in the EV motorbike market are providing longer range, indicating a positive growth trajectory. Customers are also becoming more interested in alternative fuels like CNG, which lessens reliance on conventional gasoline and diesel. EVs are anticipated to be crucial in lowering fuel costs and promoting sustainability, despite ongoing environmental worries over their lifetime.
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Two-wheelers, CVs, and PVs all have cautiously optimistic outlooks for the first quarter of this year. Recovery is likely to be fuelled by elements like delayed consumer purchases as a result of the Auto Show and new launches, as well as anticipations of higher government infrastructure spending. The automotive market’s resilience and the cooperation of OEMs and dealers suggest a promising future for the sector, even though difficulties still exist. In particular, EVs have the potential to be a major growth driver in India’s automotive industry going forward.
