Automobile sales soar 13% in February, EV push drives growth in 2-wheeler sales

The three-wheeler market witnessed a significant 24% growth, with EVs constituting 53 percent of this growth, said the Federation of Automobile Dealers Associations (FADA).

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According to the Federation of Automobile Dealers Associations (FADA), retail car sales in India witnessed a 13 percent growth in February 2024, compared to the same month last year. The FADA said that sales of two-wheelers, three-wheelers, PV’s, tractors and CVs grew by 13 percent, 24 percent, 12 percent, 11 percent and 5 percent, respectively.

According to the report, growth in the two-wheeler market was driven by the rural sector, demand for premium models and strong performance of entry-level segments.

The three-wheeler market witnessed a significant 24 percent growth, with EVs constituting 53 percent of this growth, indicating a shift towards electric vehicles. The passenger vehicles segment recorded a 12 percent growth, which is the highest February sales figures ever recorded, FADA said.

According to the FADA’s outlook report for March 2024, the near-term outlook suggests ‘cautious optimism with potential growth driven by strong signals from the rural market and financial year-end buying activities’. The report further states that the auto retail sector is influenced by a blend of positive trends and challenges.

“The rural sector’s robust signals, along with an increased demand for premium and entry-level segments, are set to bolster the 2W market. Similarly, both the 3W and CV sectors anticipate a boost in sales, driven by the financial year-end rush and an infusion of funds into the market, which is expected to stimulate purchases. In the PV sector, the confluence of financial year-end buying incentives, improved availability of vehicles and seasonal factors such as marriages is likely to propel demand,” it added.

According to the report, external factors such as crop failures in rural areas could dampen market sentiment and financial liquidity, posing additional hurdles to sustained growth.