Vehicle sales, however, rose by 12.51% sequentially indicating resilient demand in the local automobile market. FADA President Manish Raj Singhania said, “The month (October) commenced under the shadow of the inauspicious Shraddh period, persisting until the 14th. Consequently, a YoY comparison may not accurately reflect the actual trajectory of growth in the Indian auto retail sector. When compared MoM, auto retails flourished, achieving a 13% increase, with contributions from all categories.”
While sales of two-wheelers went up by 15% on a month-on-month basis, those of three-wheelers and passenger vehicles increased by 2.23% and 6.54%, respectively. Registrations of tractors and commercial vehicles went up by 14.5% and 9.8% sequentially.
|CATEGORY||OCT 2022||OCT 2023||% CHANGE YoY||SEP 2023||% CHANGE MoM|
Consumer demand was particularly strong during the Navratri with retail sales surging by 18% year-over-year, surpassing the figures of Navratri 2017. Except for tractors, which saw a decline of 8% (to 19,218 units), all categories reported good growth. Two-wheelers, three-wheelers, commercial vehicles, and passenger vehicles experienced increases of 22% (to 540,325 units), 43% (to 32,210 units), 9% (to 27,446 units), and 7% (140,082 units), respectively.
Singhania informed two-wheelers sales saw strong traction last month, buoyed by rural demand and better availability of models as well as financing solutions. “States going into elections also injected optimism into the market, leading to an increase in government spending and improved liquidity. Despite a shift in festival dates, with Diwali moving to November, the anticipation of the festive season stimulated purchase intent and dealers reported good stock preparation and robust ground efforts that led to an uptick in sales figures, showcasing a resilient and adaptive market”, he said. Two-wheeler stocks in the network stand at 40-45 days.
In the three-wheeler segment, a rise in demand for e-rickshaws helped up volumes. Strategic price support from manufacturers during the festivals also helped increase retail sales of commercial vehicles. Singhania said, “The demand for light and small commercial vehicles surged, driven by infrastructure development activities and the need for vehicle replacement. Healthy demand was witnessed especially in segments like cement, iron ore and coal transport.”
Passenger vehicle makers did record an uptick in bookings during the Navratri due to the introduction of new models, particularly in the SUV segment. “However, the impact of local elections and market saturation meant that the festive spirit didn’t translate uniformly into sales across all regions”, Singhania said. Inventory of passenger vehicles in the channel currently stands at 63-66 days.Near-term, ongoing festivities and increased consumer preference for electric vehicles are expected to push up sales of two-wheelers. Demand for commercial vehicles too are expected to remain strong this month, with festive and construction activities enhancing numbers.
However, Singhania said, the PV segment is navigating through a “tricky phase”. “Festive days might spike bookings, yet the shadow of year-end discounts looms over immediate sales. High inventory levels in PVs, at a critical 63-66 days range, demand urgent attention from OEMs. Without substantial interventions and if Diwali sales don’t rise to the occasion, the weight of unsold stock could lead to significant dealer distress”, he said.