Festival season lifts retail auto sales by 12%, two-wheelers top demand

Dealers' association expects inventory to reduce, helped by sales during weddings

Retail sales of automobiles during the festival season grew 12 per cent compared to the previous year, led by two-wheeler sales on the back of strong demand, data from a dealers’ association showed on Friday.

 

As many as 4.29 million vehicles were sold in the 42-day season, compared to 3.84 million the same time in 2023, according to the Federation of Automobile Dealers Associations (FADA). The season started on the first day of Navratri and ended 15 days after Dhanteras (October 3 to November 13).

 

As many as 3.31 million two-wheelers were sold in this festival season, growing 14 per cent from the year before (2.91 million units sold). Rural demand drove two-wheel sales, as FADA reiterated its concern about estimated inventory levels of all vehicles in November.

 

Sales of passenger vehicles grew by 7.1 per cent at 603,000 units, spurred by pent-up demand and discounts. As many as 563,000 passenger vehicles were sold in the festival season of 2023. Three-wheeler sales were up by 14 per cent at 160,000 units, compared to 150,000 from the year before. 

 

As many as 129,000 commercial vehicles were sold in this year’s festival season, up 1 per cent from 127,000 units last year. Tractor sales in this year’s festival season was down 2 per cent to 85, 216 units compared to 86,640 from the year before.

 

"While we celebrate these achievements, we acknowledge that we could have fully met or even exceeded our targets of 4.5 million units if not for the unseasonal heavy rains in South India, especially in Bengaluru and Tamil Nadu, and Cyclone Dana that affected Odisha. As the festivities conclude, FADA anticipates passenger vehicle stock levels will reduce further from what we reported in our October retail data press release," said C S Vigneshwar, president of the association.

 

A complete picture on inventory will emerge when November ends, said FADA, urging original equipment manufacturers (OEM) to focus on liquidating stock so that dealers can enter the New Year with a recommended 21 days of inventory. "OEMs are finally listening to our plight. Still inventory levels should be further down. By the end of this month, we expect it to be down by another five units to 70-75 days," Vigneshwar said.

 

In two wheelers, the share of rural sales increased on a monthly basis from 53 per cent to 56 per cent in October itself, that contributed to majority of the festive season. On the other hand, in passenger vehicles, three wheelers, and commercial vehicles, rural share fell flat at 61 per cent, 52 per cent, and  52 per cent respectively. According to FADA, the rural share further picked up in November, specially in two wheelers. 

 

Dealers reckon that the 4.8 million weddings in the next two months will help sales. "Looking ahead, the auto industry is yet to fully benefit from a government push in infrastructure spending, which we expect will bolster commercial vehicle sales. Additionally, tractors should perform better, supported by good rainfall and the government's increase in the Minimum Support Price of crops, putting more money into farmers' hands," he said.