Retail demand to be key as automakers continue record vehicle production in Feb

livemint.com:

NEW DELHI : The era of inordinately long waiting periods for passenger vehicles may be ending as carmakers continued to ship a record number in February, building up stock in the dealership network. Carmakers will therefore have to keep a close watch on demand, as inventories, which have already reached 26 days, are likely to pile up in showrooms with original equipment manufacturers having been able to fulfil pending orders and incremental sales depending solely on the pace of fresh demand, a top industry executive said.

The industry is expecting to end the fiscal year in March at a growth of 8.1% at 4.2 million units, Shashank Srivastava, senior executive director, Maruti Suzuki, India's largest carmaker said. For two-wheeler makers Hero MotoCorp, TVS Motor Co and Bajaj Auto, factory-gate dispatches clocked a strong double-digit growth in February compared to a year ago, even as registrations of two-wheelers grew at a much slower pace (13.2% for all two-wheeler OEMs, including EVs, in February year-on-year), leading to inventory addition at showroom, analysis by brokerage Elara Capital showed.

For Royal Enfield, which manufactures premium motorcycles such as the Classic 350 and Himalayan, however, wholesales grew at a mere 5% whereas retail registrations shrank 1.3% last month compared to the same month in 2023. Sales of electric two-wheelers, however, remained flat compared to last month, reflecting a stagnation in demand.

Registrations of high-speed electric two-wheelers were up 24% year-on-year (due to the extra day in February because of 2024 being a leap year to a certain extent) but were flat compared to January at 81,963 units. In February 2024, the passenger vehicle industry recorded wholesales of 373,177 units