The Electric Mobility Promotion Scheme (EMPS), unveiled by the Ministry of Heavy Industries, aims to bolster India's electric vehicle (EV) industry in line with the vision of Atmanirbhar Bharat. Operative for four months, the scheme focuses on accelerating EV adoption and manufacturing, particularly targeting electric two-wheelers (e2W) and three-wheelers (e3W). With an allocated budget of US$ 60.3 million (Rs. 500 crore) between April 1, 2024, and July 31, 2024, the scheme aims to facilitate the purchase of 3,72,215 EVs, thereby promoting the growth of eco-friendly transportation options and nurturing the EV manufacturing ecosystem.

Production: -

The total production of Passenger Vehicles, Three Wheelers, Two Wheelers, and Quadricycle in February 2024 was 22,94,411units.

Domestic Sales: -

In February 2024, sales in the Passenger vehicle segment stood at 3,70,786 units, in Two-wheeler segment at 15,20,761 units and in Three-wheeler segment 54,584 units were sold. According to the Society of Indian Automobile Manufacturers (SIAM), Passenger Vehicles, Two-Wheelers, and Three-Wheelers have posted growth in February 2024 compared to the previous year, while Commercial Vehicles have witnessed a slight de-growth. Overall robust GDP growth of the country in Q3 of 2023-24 has helped the Auto Sector. Passenger Vehicles again reported its highest ever sales of February posting sales of 3.7 Lakh units with a growth of 10.8%, compared to February 2023. Three-Wheelers also reported moderate growth of 8.3% posting sales of about 0.55 Lakh units in February 2024. Two Wheelers posted an appreciable growth of 34.6% compared to February 2023 posting sales of 15.2 Lakh units.

Bajaj Auto: -

Bajaj Auto Limited has reported its sales figures for the month of February 2024. In the two-wheeler segment, domestic sales stood at 170,527 units in February 2024, showing a rise of 42 per cent compared to the same month last year when the brand managed to sell 120,335 units. Two-wheelers export numbers rose by 08 percent, with 124,157 units sold in February 2024 compared to 115,021 units in February 2023. Combining both domestic and export figures for two-wheelers, Bajaj Auto Limited sold a total of 294,684 units in February 2024, marking a 25 per cent increase from the 235,356 units sold in February 2023.

Moving to commercial vehicles, the company reported domestic sales of 36,367 units in February 2024, a substantial increase of 10 per cent compared to the 32,956 units sold in February 2023. Moreover, exports for commercial vehicles saw a sharp rise of 31 percent, with 15,611 units in February 2024 compared to 11,914 units in the corresponding period last year. When considering both domestic and export numbers for commercial vehicles, the total sales in February 2024 amounted to 51,978 units, showing a significant growth of 16 per cent from the 44,870 units sold in February 2023.

As for overall sales, including both two-wheelers and commercial vehicles, domestic sales in February 2024 rose to 206,894 units, up 35 percent from the 153,291 units sold in February 2023. Similarly, exports saw a 10 per cent increase, with 139,768 units in February 2024 compared to 126,935 units in the same month last year. The total sales for Bajaj Auto Limited in February 2024 accounted for 346,662 units, reflecting a 24 percent increase from the 280,226 units sold in February 2023.

Hero MotoCorp: -

Hero MotoCorp, the world’s largest manufacturer of motorcycles and scooters, sold 468,410 units in February 2024. This translates into a robust 19% growth over the corresponding month (February 2023), when it had sold 394,460 units.

Hero MotoCorp sold 436,929 motorcycles in February 2024 compared to 371,854 units sold during the same period last year i.e. February 2023. In case of scooters, the company sold 31,481 units last month against 22,606 units sold during the corresponding month last year. Now, coming to the domestic sales, the company sold 445,257 units in India in February 2024 as against 382,317 units sold here during the same period last year. The exports also saw a significant rise as the company dispatched 23,153 units last month compared to 12,143 units exported during February 2023.

The volumes in the month of February indicate the continuously improving consumer sentiments and the company expects the positive trend to continue in the coming months, on the back of favourable economic indicators. In line with strategy of growing the core and expanding premium product portfolio, the Company started the sales of its recently launched motorcycle – Xtreme 125R and expanded its upper premium portfolio of 440cc motorcycles with the launch of Mavrick 440, deliveries of which are to begin in April 2024. The Company is in the process of scaling up the volumes of Harley-Davidson X440 and Mavrick 440, the first phase of which should be completed by the middle of this year.

TVS motors: -

TVS Motor Company recorded monthly sales of 368,424 units in February 2024 with a growth of 33% as against 276,150 units in February 2023.

Total two-wheelers registered a growth of 34% with sales increasing from 267,026 units in February 2023 to 357,810 units in February 2024. Domestic two-wheeler registered growth of 21% with sales increasing from 221,402 units in February 2023 to 267,502 units in February 2024. Motorcycle registered a growth of 46% with sales increasing from 126,243 units in February 2023 to 184,023 units in February 2024. Scooter registered a growth of 26% with sales increasing from 104,825 units in February 2023 to 132,152 units in February 2024.

The company's total exports grew by 85% increasing from 53,405 units registered in February 2023 to 98,856 units in February 2024. Two-wheeler exports registered a growth of 98% with sales increasing from 45,624 units registered in February 2023 to 90,308 units in February 2024. Three-wheeler registered a growth of 16% with sales increasing from 9,124 units in February 2023 to 10,614 units in February 2024.

EV sales registered a growth of 16% with sales increasing from 15,522 units in February 2023 to 17,959 units in February 2024.

Maruti Suzuki India Limited (MSIL):

In February 2024, Maruti Suzuki India Limited sold a total of 197,471 units. Total sales in the month include domestic sales of 163,397 units, sales to other OEM of 5,147 units and exports of 28,927 units.

In February 2024, the mini segment comprising of Alto and S-Presso contributed to 14,782 units, down from 21,875 units in February 2023. Compact segment sales accounted for 71,627 units decreasing from 71,627 units in February 2023.

Ciaz, a lone offering in the mid-size segment raked in 481 units. In the broadly defined UV segment, wholesales stood at 61,234 units increasing from 33,550 units. The Eeco van contributed to 12,147 units. With this, total domestic PV sales accounted for 160,271 units. MSIL offers the Super Carry in the LCV segment. Sales stood at 3,126 units, down from 3,356 units. That takes total MSIL domestic sales to 163,397 units.

Maruti also make cars for Toyota India under an ongoing agreement. Sales to other OEM was reported at 5,147 units, up from 4,291 units. This took total domestic sales and sales to OEM up to 168,544 units. Exports rose to 28,927 units, up from 17,207 units. In February 2024, sales managed to cross 197,000 units.

Tata Motors: -

Tata Motors Limited sales in the domestic & international market for February 2024 stood at 86,406 vehicles, compared to 79,705 units during February 2023.

Domestic sale of MH&ICV in February 2024, including trucks and buses, stood at 16,227 units, compared to 17,282 units in February 2023. Total sales for MH&ICV Domestic & International Business in February 2024, including trucks and buses, stood at 16,663 units compared to 17,928 units in February 2023.

Total passenger vehicle sales of Tata Motors stood at 51,321 units in February 2024, rising 19 percent from 43,140 units sold in February 2023. The domestic passenger vehicle sales stood at 51,267 units in February 2024. The company has however found its electric models much in demand with 6,923 units sold last month, up 30 percent over 5,318 units sold in February 2023.

Total domestic commercial vehicles sales are at 33,567 units in February 2024, down 04 percent over 35,144 units sold in February 2023. In the HCV segment, sales decreased 15 percent Y-o-Y to 10,091 units while in ILMCV segment, sales decrease 06 percent at 5,083 units decreasing from 5,426 units in February last year. Passenger carrier sales reached 4,692 units in February 2024 compared to 3,632 units in February 2023. SCV cargo and Pick-up sales decreased 04 percent Y-o-Y from 14,218 units sold in February 2023 to 13,701 units sold last month. Commercial vehicle exports increased 07 percent from 1,421 units shipped in February 2023 to 1,518 units exported in February 2024.

Outlook: -

According to the Federation of Automobile Dealers Associations (FADA), In February 2024, Indian Auto Retail saw a robust overall growth of 13% Y-o-Y. Every vehicle category, including 2W, 3W, PV, Tractors, and CV, registered growth rates of 13%, 24%, 12%, 11%, and 5% respectively. The 2W market's 13% Y-o-Y growth was driven by the rural sector, premium model demand, and strong entry-level segment performance, with broader product availability and compelling offers enhancing product acceptance. Factors like favourable marriage dates and improved economic conditions also contributed to this positive growth. The 3W market surged by 24% Y-o-Y, with EVs making up 53% of this growth, fuelled by first-time users and a shift towards Electric E-Rickshaws, alongside better market sentiment and consumer engagement. The PV segment has exhibited an impressive 12% Y-o-Y growth, achieving the highest sales figures ever recorded for the month of February.

This upward trajectory was propelled by the strategic introduction of new products and enhanced vehicle availability. While the sector benefits from favourable customer sentiment and the successful introduction of models in high demand, the persistently elevated inventory levels, remaining at 50-55 days, present a significant concern. It is imperative for PV OEMs to undertake adjustments in production to mitigate these high inventory levels, thereby reducing the financial burden of carrying costs on dealers as it is vital for maintaining the financial health of dealers. Adopting this forward-looking stance is essential for ensuring the sustained growth and vitality of this segment.

The luxury vehicle market in India is witnessing substantial growth, paralleled by rising demand for loans to facilitate these high-end purchases. Leading banks alongside non-bank lenders and automaker captive financiers like Mercedes-Benz and BMW, are observing a significant uptick in luxury car financing. While overall outstanding bank loans for personal vehicle purchases reached US$ 69.9 billion (Rs. 5.8 lakh crore) by the end of December, specific luxury vehicle financing data is unavailable. Nevertheless, industry insiders note that luxury car financing is emerging as a rapidly growing segment within lenders' broader car loan portfolios.

The CV segment grew by 5% Y-o-Y, overcoming challenges through fleet purchases and school buses, strong sectoral demand and improved financing, despite obstacles like cash flow shortages and election-related purchase deferrals, highlighting the sector's resilience and gradual recovery. For the near term outlook, 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.

However, the anticipation of elections casts a shadow over this positive scenario, with potential deferred purchases across segments. The commercial vehicle sector, in particular, might face a cautious approach from customers waiting for the outcome of general elections. Supply constraints further complicate the landscape, especially in the PV segment, where the availability of popular variants remains a concern. External factors like crop failures in rural areas could also dampen market sentiment and financial liquidity, posing additional hurdles to sustained growth.

Overall, the near-term outlook for March 2024 in the auto retail sector is one of cautious optimism. Financial year-end activities traditionally spur purchasing across segments, yet the feedback from dealers highlights the nuanced challenges of inventory management, extremely aggressive target settings and evolving consumer preferences. OEMs' ability to address these challenges through strategic product introductions, supportive dealer policies and adaptive sales strategies will be paramount in maintaining the sector's growth momentum and achieving success in the near term.

Tables and Charts:

Source: FADA