The Federation of Automobile Dealers Associations (FADA) reported on Monday that retail car sales in the domestic market fell 7.73 percent year over year in October of this year to 21,17,596 units. This decline was primarily caused by a decline in the uptake of two-wheelers, as new purchases were hindered by the unfavorable period of Shraddh. According to a statement from the FADA, retail car sales in the domestic market were 22,95,099 units in October 2022.
According to the most recent FADA statistics, two-wheeler retail sales were 15,07,756 units last month compared to 17,25,043 units in the same time last year, a decrease of 12.60 percent. Comparably, the retail sales of passenger vehicles (PVs) decreased by 1.35 percent to 3,53,990 units last month from 3,58,884 units in October 2022.
Conversely, sales of three-wheelers increased by 45.63 percent to 1,04,711 units from 71,903 units in the same month last year. Retail sales of tractors increased by 6.15 percent to 62,440 units in October 2022 from 58,823 units the previous month.
Retail sales of commercial vehicles rose 10.26% to 88,699 units in October of this year from 80,446 units in the same month last year. Under the shadow of the unlucky Shraddh era, the month began and continued till October 14. Thus, a year-over-year comparison would not fairly depict the true development trajectory of the Indian auto retail industry, according to FADA President Manish Raj Singhania.
According to FADA statistics, there was an 8% year-over-year reduction in the first half of October, which is known as the Shraddh period. However, a month-over-month comparison showed a 13% gain that was “indicative of resilient market demand.” According to FADA, all car categories saw growth as a result of the continuing celebrations.
Retail sales at Navratri in 2023 surged by 18% year over year, exceeding the results from Navratri in 2017.” With the exception of tractors, which witnessed an 8% decrease, every category saw excellent development, according to Singhania. He said that during Navratri, the number of two-wheelers, three-wheelers, commercial vehicles, and passenger cars increased by22%,43%,9%, and 7%, respectively.
Singhania said that the two-wheeler market experienced a number of encouraging developments in October and throughout the Navratri season, driven by increased demand in rural areas and a festive mood. He added, “during Navratri, despite regional variability, the industry witnessed a surge in bookings,” propelled by the introduction of new models, particularly SUVs, and the availability of enticing consumer offers. The passenger vehicle segment navigated a complex landscape, characterized by both enthusiasm and caution.
The influence of municipal elections and market saturation, he said, meant that not all areas saw a consistent increase in sales from the holiday enthusiasm. According to Singhania, the three-wheeler market maintained its strong demand during Navratri, mostly due to affordable financing choices and a notable increase in interest in e-rickshaws, which indicates a positive shift towards electrification.
According to Singhania, there was a consistent demand throughout October because of the impending Diwali celebration in November and the introduction of new models. Overall, the PV market was robust at this time, helped by a better product lineup than it was the previous year, when a big problem with stock availability occurred. “The near-term outlook for the auto sector is a blend of highs and lows as we approach year-end,” the FADA said in reference to the outlook. In spite of supply problems, it noted, celebrations and the harvest season, particularly paddy, are predicted to increase two-wheeler sales. This confidence is fueled by new initiatives and a drive toward electrification. According to FADA, the commercial vehicle market is expecting a robust November as planned financial incentives, together with construction and celebration-related activities that would boost demand.
But the PV market is now negotiating a challenging time. Although reservations may rise during festive days, year-end reductions cast a shadow over immediate sales, according to FADA. In addition, it said, “Without substantial interventions and if Diwali sales don’t rise to the occasion, the weight of unsold stock could lead to significant dealer distress.” High inventory levels in PVs, at a crucial 63-66 day range, need immediate action from OEMs.
According to FADA, “Immediate and decisive action is imperative to counter the risk of a financial squeeze as the year closes,” and it might have an impact on the whole business.