In a notable upswing, Indian automobile retail sales for September registered a 20 per cent increase compared to the same period last year, reaching 1.89 million units. The sales surged due to a positive market sentiment driven by favourable monsoon, data released by the Federation of Automobile Dealers’ Associations (FADA) shows.
Except for tractors, which witnessed a 10 per cent decline in sales, all other automotive categories experienced significant growth. Two-wheelers posted a robust 22 per cent increase, three-wheelers soared by 49 per cent, passenger vehicles saw a steady 19 per cent rise, and commercial vehicles also reported a 5 per cent growth. Three-wheeler sales reached an all-time high in September, with 102,426 units sold, a jump from the 68,937 units sold in the same month last year. This surpassed the previous record set in August 2023, which stood at 99,907 units.
However, an area of concern for dealers is the soaring inventory levels, which reached an all-time high of 60-65 days.
The industry is, meanwhile, optimistic about the upcoming festive season, including Durga Puja and Navratri. “September’s auto retail celebrated a 20 per cent year-on-year leap, continuing the momentum from the previous month while marking a 3.5 per cent month-on-month increase, seamlessly transitioning into the festive period’s sweet spot set to unfold over the next 42 days,” said Manish Raj Singhania, president, FADA.
During the period under review, the two-wheeler segment witnessed rose from 1.08 million units last year to 1.31 million units this year. Singhania explained, “With the introduction of new models and attractive promotional offers, demand increased, especially in rural areas, fostering improved market sentiments. This uptick in demand was accompanied by heightened customer walk-ins and an overall positive market response.” He added that better stock availability compared to the previous year and a favourable reception to newly launched entry-level products have set an optimistic tone for the upcoming festive season.
September 2023 also showcased a resilient commercial vehicles segment, observing noticeable demand in coal, cement, and the general market load sectors. The passenger carrier segment also experienced an uptick. FADA said this positive trend can be attributed to the adequate deployment of funds from the central government towards infrastructure development, which fostered an environment for bulk deals, especially in tippers and government sectors. During the month, commercial vehicle sales increased from 77,054 units last year to 80,804 units this year. Dealers noted a discernible improvement in market sentiment post-Covid, supporting healthy traction in heavy commercial vehicles (HCVs), light commercial vehicles (LCVs) and buses, signalling a revitalised tourism market.
The passenger vehicle (PV) category experienced a stimulating resurgence as the market enjoyed improved vehicle availability and an influx of new and refreshed models from various original equipment manufacturers (OEMs). This uplift was supported by enhanced supplies and an increasing variety in the product portfolio, catering to diversifying consumer demands. Sales reached 332,248 units compared to 279,137 in September 2022.
“With inventory for PV reaching an unprecedented 60-65 days threshold, it’s crucial for OEMs to proceed with caution, avoiding excessive inventory pushes, thereby ensuring a market that’s both vibrant and stable during the festive spree,” Singhania said. “As we move past the Shraadh period on October 14, the market is poised for the onset of Navratri, heralding a 42-day festive window. With these promising indicators, FADA adopts an optimistic stance, anticipating a thriving festive season for the Indian Auto Retail sector,” he added.