The Indian auto industry is poised for continued robust retail performance through the end of the calendar year and with an estimated 4.8 million weddings scheduled nationwide in November and December, vehicle purchases also traditionally witnesses an uptick during the wedding season, said Federation of Automobile Dealers Associations (FADA) on Wednesday.
FADA anticipates that this will translate into strong sales in both, the two-wheeler (2W) and passenger vehicle (PV) segments in the near term. The industry is preparing for an unprecedented surge in demand for wedding-related goods and services, it said.
However, FADA also cautioned that the PV inventories still remain high, and urged the original equipment manufacturers (OEMs) to rationalise supply to prevent excess stock. Dealers in the commercial vehicle (CV) segment also remains cautious due to slow construction activities, financial constraints, and expected post-festivity demand decline.
“The auto industry remains optimistic about near-term growth, particularly with the wedding season ahead. However, potential challenges such as inventory overstock and economic headwinds may affect sales momentum towards the end of the year,” C S Vigneshwar, President, FADA said while sharing the monthly retail sales data.
FADA highlighted the need for strategic inventory management and ongoing caution as the sector navigates these factors.
In terms of monthly retail sales, FADA said PV sales grew by 32.38 per cent year-on-year (YoY) to 4,83,159 units in October as compared with 3,64,991 units in the same month last year.
Two-wheeler retail sales also grew by 36.34 per cent YoY to 20,65,095 units in October as against 15,14,634 units in the corresponding month last year. Three-wheeler sales grew by 11.45 per cent YoY to 1,22,846 units during last month as against 1,10,221 units in October 2023.
CV retail sales were recorded at 97,411 units in October, a growth of 6.37 per cent YoY as compared with 91,576 units in the same month last year.
Tractor sales grew marginally by three per cent YoY to 64,433 units last month as against 62,507 units in October 2023.
The grand total of all categories of vehicles registrations grew by 32.14 per cent YoY to 28,32,944 units during the month as compared with 21,43,929 units in October 2023, FADA said.
“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 per cent 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,” Vigneshwar said.
The rural market once again played a leading role in driving growth, particularly in the 2W and PV segments.
Additionally, the government’s announcement of an increase in the Minimum Support Price (MSP) for Rabi crops further boosted market sentiments, he said.
“Overall, while the industry is optimistic about near-term growth driven by the wedding season and favourable market conditions, dealers are mindful of potential challenges that could affect sales momentum as the year concludes. The mixed sentiments reflected in the survey highlight the need for strategic planning and cautious optimism as the auto sector navigates the remaining months of the year,” he added.