The Federation of Automobile Dealers Associations (FADA) has released a report stating that retail sales of automobiles in the domestic market witnessed a 7.73 percent year-on-year decline in October this year, totaling 21,17,596 units. This dip is primarily attributed to reduced two-wheeler sales, influenced by the inauspicious Shraddh period, impacting new purchases.
For comparison, retail sales of automobiles in the domestic market had reached 22,95,099 units in October 2022.
The latest data from FADA shows that two-wheeler retail sales in October 2023 were at 15,07,756 units, down by 12.60 percent from 17,25,043 units in the corresponding period of the previous year. Similarly, passenger vehicle (PV) retail saw a 1.35 percent decline, with 3,53,990 units sold last month compared to 3,58,884 units in October 2022.
On a positive note, three-wheeler sales witnessed a substantial increase of 45.63 percent, reaching 1,04,711 units, up from 71,903 units in the same period last year. Tractor retail sales also showed growth, increasing by 6.15 percent, totaling 62,440 units in comparison to 58,823 units in October 2022.
In contrast, commercial vehicles retail sales saw a notable 10.26 percent increase in October this year, with 88,699 units sold compared to 80,446 units in the year-ago month. FADA President Manish Raj Singhania acknowledged that the Shraddh period cast a shadow over the month’s initial days. Consequently, making a year-on-year comparison might not accurately reflect the actual trajectory of growth in the Indian Auto Retail sector.
Singhania pointed out that during the first half of October, marked by the Shraddh period, there was an 8 percent year-on-year decline. However, a month-on-month comparison revealed a 13 percent growth, indicating resilient market demand. With ongoing festivities, all automotive categories experienced momentum.
During Navratri 2023, retail sales soared by 18 percent year-over-year, surpassing the figures of Navratri 2017. Except for tractors, which saw an 8 percent decline, all categories exhibited commendable growth. Two-wheelers, three-wheelers, commercial vehicles, and passenger vehicles experienced increases of 22 percent, 43 percent, 9 percent, and 7 percent, respectively during Navratri.
Singhania added that while two-wheelers benefited from festive cheer and stronger rural demand, the passenger vehicles segment navigated a complex landscape marked by both enthusiasm and caution. He emphasized that during Navratri, the industry witnessed a surge in bookings, buoyed by the introduction of new models, particularly SUVs, and the availability of attractive consumer offers.
However, local elections and market saturation affected the uniformity of sales across regions. The three-wheeler segment continued its demand upswing during Navratri, driven by competitive finance options and a significant rise in e-Rickshaw interest, indicating a healthy move towards electrification.
Overall, Singhania noted that the anticipation for Diwali in November and the launch of new models generated steady demand. Despite concerns regarding supply, the near-term outlook for the auto sector presents a combination of highs and lows as the year-end approaches. Festivities and the harvest season are expected to boost two-wheeler sales, while the commercial vehicle segment anticipates a robust November due to festive and construction activities.