Bengaluru, Jan 8 (KNN) The robust demand for two-wheelers and substantial discounts on passenger cars pushed retail vehicle sales in India by 21 per cent in December, marking the fastest growth in 2023, according to Federation of Automobile Dealers Association (FADA).

Two-wheeler sales, comprising motorcycles and scooters, experienced a notable 28 per cent increase, reaching 1.45 million units during the month. This growth was particularly prominent in the tail end of the year's wedding season. Notably, overall retail sales had declined by 5.4 per cent in December 2022, primarily due to weak demand for two-wheelers.

FADA had anticipated heightened vehicle sales in the period between Nov. 23 – Dec. 15, coinciding with approximately 3.8 million weddings in India, especially in rural areas.

While analysts were optimistic about the revival in domestic two-wheeler volumes, there were concerns about slowing growth in passenger vehicles (PVs), including small cars, sedans, and SUVs, as pent-up demand waned.

December witnessed a modest 2.7 per cent growth in PV sales, primarily driven by SUV demand, as significant discounts helped reduce excess inventory.

High discounts on smaller cars, which constituted a substantial portion of excess inventory since April, contributed to a slight reduction in PV inventory from 61-64 days in November to 55-58 days.

FADA President Manish Raj Singhania highlighted that any inventory level above 30 days is considered loss-making for dealers, and while the recommended level is 21 days, PV inventory levels remained high.

FADA expressed cautious optimism for January, citing high PV inventory levels but anticipated growth in 2024 through new launches in the auto industry.

(KNN Bureau)