Automobile retail sales in India fell 8% in October, according to industry figures.

Retail car sales in India fell roughly 8% year on year in October, according to figures provided on November 6 by the Federation of Automobile Dealers Associations (FADA). The first half of October 2023, which was distinguished by the Shraddh holiday, when consumers typically avoided big-ticket purchases, witnessed an 8% YoY fall in vehicle sales, possibly suppressing the entire monthly results.

Automobile sales, on the other hand, increased 12.5% month on month, according to data. Despite the ongoing festivities, all automobile categories witnessed monthly momentum. According to FADA data, two-wheelers (2W), three-wheelers (3W), passenger vehicles (PV), tractors (Trac), and commercial vehicles (CV) increased by 15%, 2%, 7%, 15%, and 10%, respectively, on a MoM basis. Except for tractors, all categories gained during Navratri. Two-wheelers, three-wheelers, commercial vehicles, and passenger vehicles increased by 22%, 43%, 9%, and 6.5%, respectively, while tractors decreased by 8%.

“The month began in the shadow of the unlucky Shraddh period, which lasted until the 14th.” As a result, a year-on-year comparison may not correctly reflect the real development trajectory in the Indian auto retail sector. When compared to the previous month, Auto Retails grew by 13%, with contributions from all categories. “Two-wheelers, three-wheelers, passenger vehicles, tractors, and commercial vehicles grew by 15%, 2%, 7%, 15%, and 10%, respectively, underscoring the sector’s robust growth momentum,” said Manish Raj Singhania, President of FADA. Furthermore, with passenger vehicle inventory levels at an all-time high of 63-66 days, FADA reported that dealerships are expressing capacity problems.

FADA has issued a red flag, encouraging manufacturers to not only moderate vehicle deployments but also to implement more aggressive and appealing schemes as soon as possible. This dual approach is critical to assisting dealers in clearing their inventory before the end of the year, avoiding the potential financial ramifications of extra unsold stock, according to the company.

it: NAGARA GOPAL

Retail vehicle sales across India declined around 8% year-on-year in the festive month of October, data released by the Federation of Automobile Dealers Associations (FADA) showed on November 6. The first half of October 2023, marked by the Shraddh period when people largely stay away from big-ticket purchases, saw an 8% YoY decline in vehicle sales, which has likely suppressed the overall monthly figures.

On a month-on-month, automobile sales though rose 12.5%, data showed. With ongoing festivities, all automotive categories, however, experienced momentum on a monthly basis. Two-wheelers (2W), three-wheelers (3W), passenger vehicles (PV), tractors (Trac) and commercial vehicles (CV) grew by 15%, 2%, 7%, 15% and 10% respectively on a MoM basis, FADA data showed. During Navratri days, all categories except tractors saw gains. Two-wheelers, three-wheelers, commercial vehicles and passenger vehicles grew by 22%, 43%, 9% and 6.5%, respectively, while tractors faced an 8% decline.

“The month 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 to MoM, Auto Retails flourished, achieving a 13% increase, with contributions from all categories. Two-wheelers, three-wheelers, passenger vehicles, tractors, and commercial vehicles expanded by 15%, 2%, 7%, 15%, and 10%, respectively, underscoring the sector’s robust growth momentum,” FADA President, Manish Raj Singhania. Further, with passenger vehicle inventory levels soaring to an all-time high of 63-66 days, FADA said dealerships are signalling capacity concerns.

FADA said it has issued a red flag, urging manufacturers to not only moderate vehicle dispatches but also to introduce more aggressive and attractive schemes promptly. This dual approach is essential to help dealers clear their inventory before year-end, averting the potential financial repercussions associated with excess unsold stock, it said.

Sectoral outlook

As the year comes to a close, FADA predicts the auto industry’s near-term forecast will be a mix of highs and lows. Despite supply worries, festivities and harvest season (particularly paddy) are projected to enhance two-wheeler sales, with confidence fueled by new initiatives and a push toward electrification. Commercial vehicles are expected to perform well in November, with seasonal and construction activity boosting demand, as well as anticipated financial programs.

However, the passenger vehicle segment is going through a difficult period. While the holidays may increase bookings, the threat of year-end discounts hovers over immediate sales, according to FADA. High inventory levels in PVs, in a critical 63-66 day range, necessitate immediate attention from producers, it stated again. “Without significant interventions, and if Diwali sales do not rise to the occasion, the weight of unsold stock could lead to significant dealer distress,” says FADA, underlining its fears about potential industry-wide ramifications. “Immediate and decisive action is required to mitigate the risk of a financial squeeze as the year comes to a close,” FADA stated.