Auto retails get a festive season boost, overall sales jump 32% YoY

Vehicle registrations, a proxy for retail sales, surged 32% YoY in October, driven by the convergence of two major festivals, Navratri and Diwali, which fell in the same month. According to the Federation of Automobile Dealers Associations (FADA), two-wheeler sales saw a 36.34% increase, reaching 20,65,095 units. Overall retail sales rose to 28,32,944 units in October from 21,43,929 units last year. However, the comparison is not entirely accurate as, in 2023, the festivals were spread over October and November. Passenger vehicle sales also grew robustly by 32.38%, reaching 4,83,159 units, bolstered by heavy discounts, attractive consumer offers, and many new model launches.

The rural market was pivotal in driving growth, particularly in the two-wheeler and passenger vehicle segments. Additionally, the Government of India’s increase in the Minimum Support Price (MSP) for Rabi crops boosted market sentiments. Sales in other segments also saw a positive trend, with three-wheelers up 11%, tractors rising by 3%, and commercial vehicles growing by 6% YoY. Despite the strong sales, high inventory levels remained a concern, with passenger vehicle makers continuing to stock dealers heavily, resulting in an inventory reduction of only five days, leaving the overall inventory at a high of 75-80 days. This high stock level will likely keep substantial discounts in place until the end of this year.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.