Auto retails get a festive season boost, overall sales jump 32% year-on-year

Vehicle registration– a proxy for retail sales, rose 32% year-on-year in October as both Navratri and Diwali—the major festivals fell in the same month, the Federation of Automobile Dealers Associations (FADA) said in a statement on Thursday. Led by the two wheelers which saw the sales jump 36.34% to 20,65,095 units over the year ago period, the overall retails during the month rose to 28,32,944 million units in October from 21,43,929 in the same month. The numbers, however, are not strictly comparable as unlike this year, the aforementioned festivals were spread over October and November in 2023.Led by steep discounts and attractive consumer offers doled out by the automakers, passenger vehicle sales grew at a fast clip advancing 32.38% to 4,83,159 units during the month over the same month last year, said FADA. A flurry of new model launches also spurred demand perking up sentiments.

“October 2024 witnessed the convergence of two major festivals, Navratri and Diwali, both occurring in the same month. These festivities traditionally account for 30–35% of total annual auto sales, so the industry’s focus was keenly on how October would unfold. With dealers entering this crucial period fully committed and carrying all-time high inventory levels, the month did not disappoint,” C S Vigneshwar.

The rural market once again played a leading role in driving growth, particularly in the 2W and PV segments. Additionally, the Government of India’s announcement of an increase in the Minimum Support Price (MSP) for Rabi crops further boosted market sentiments, he noted. Most of the other segments also surged. While 3 wheelers were up 11%, tractors rose 3% and commercial vehicles increased 6% YoY.

However, despite strong sales, the dealer flagged high inventory levels as a major concern. Passenger vehicle makers continue to heavily stock dealers, resulting in inventory levels decreasing by only five days, with overall inventory still at a high of 75–80 days, it said. This may thus lead the season of substantial discounts to continue until the end of the calendar year, it noted.