Auto retail sales dip 7.7% to 21.2 lakh in October: FADA

Auto retail sales in the domestic market dipped 7.73% year-on-year in October 2023 to 21,17,596 units, primarily due to a 12.6% YoY fall in two-wheeler sales amid the "inauspicious period of Shraddh" that affected the new purchases, the Federation of Automobile Dealers Associations (FADA) said in its latest report today.

The auto retail sale had surged 12.51% in the previous month on a YoY basis to 18,82,071. "The first half of October '23, marked by the Shraddh period, saw an 8% YoY decline. However, a MoM comparison reveals a 13% surge, indicative of resilient market demand," FADA says in its monthly vehicle retail data report.

In October 2023, the PV segment navigated a “complex landscape”, marked by both enthusiasm and caution, says FADA. "During Navratri, despite regional variability, the industry witnessed a surge in bookings, buoyed by the introduction of compelling new models. However, the impact of local elections and market saturation meant that the festive spirit didn't translate uniformly into sales across all regions."

In the PV category, Maruti Suzuki India, Hyundai India and Tata Motors Ltd topped the chart in October 2023, grabbing market share of 40.97%, 14.33% and 13.80%, respectively. In the 2W category, Hero Motocorp, Honda Motorcycle, and TVS Motor Company stayed in the top three, securing market share of 27.71%, 26.67%, and 16.68%, respectively.

FADA president Manish Raj Singhania says the month commenced under the shadow of the inauspicious Shraddh period, persisting until the 14th. "A YoY comparison may not accurately reflect the actual trajectory of growth in the Indian Auto Retail sector," says Singhania. 

On MoM basis, all automotive categories experienced momentum amid ongoing festivities, the auto retail body says, adding that two-wheelers (2W), three-wheelers (3W), passenger vehicles (PV), tractors (Trac) and commercial vehicles (CV) sales grew by 15%, 2%, 7%, 15% and 10%, respectively.

During the auspicious occasion of Navratri, all categories except tractors saw gains. Two-wheelers, three-wheelers, commercial vehicles and passenger vehicles grew by 22%, 43%, 9% and 6.5%, respectively, while tractors faced an 8% decline, the FADA data shows.

Three-wheelers reached peak performance in October 2023, with retail sales hitting an all-time high of 1,04,711 vehicles, eclipsing last month's record.

The commercial vehicle segment also experienced robust bookings in October, says FADA. "Healthy demand was witnessed especially in segments like cement, iron ore and coal transport."

In its near-term outlook, FADA says it is "a blend of highs and lows". Festivities, along with harvest season (especially paddy), are expected to boost 2W sales, with optimism fuelled by new schemes and a push towards electrification, despite supply concerns, says FADA. 

"CV’s are looking at a strong November, with festive and construction activities enhancing demand, alongside anticipated financial schemes. However, the PV segment is navigating through a tricky phase. Festive days might spike bookings, yet the shadow of year-end discounts looms over immediate sales." 

High inventory levels in PVs, at a critical 63-66 days range, demand urgent attention from OEMs, the auto retail body stresses.