Car sales jump 32% in Oct; 2-wheelers see 36% growth: FADA

Retail sales of passenger vehicles increased 32.38% year-on-year to 4.83 lakh units in October 2024 compared with 3.64 lakh units in the corresponding month last year.

“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,” says FADA president C S Vigneshwar.

The passenger vehicle segment’s growth was driven by the festivals coinciding in October, boosting consumer purchasing, the auto dealers’ lobby says. Dealers highlighted that aggressive offers, attractive schemes and new model introductions further stimulated demand. Enhanced vehicle availability and strong market interest, especially for SUVs and new products, also contributed to the exceptional sales, FADA says.

However, despite strong sales, automakers 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. This may thus lead the season of substantial discounts to continue until the end of the calendar year, cautions FADA.

Two-wheeler sales surged by 36% year-on-year to 20.65 lakh units in October compared with 15.14 lakh units in the same month last year. The coincidence of major festivals in the same month spurred consumer purchasing, says FADA. Dealers reported that attractive festive schemes, discounts and new model launches significantly stimulated customer interest. Enhanced stock availability and better vehicle supplies from manufacturers enabled dealers to meet the increased demand. Positive rural sentiments, aided by favourable monsoons and crop expectations, also contributed to the strong performance. Overall, the combination of festive celebrations, promotional offers and positive market conditions led to an exceptional month for two-wheeler dealers, says FADA.

The rural market once again played a leading role in driving growth, particularly in the two-wheeler and passenger vehicle segments, says FADA.

The commercial vehicle segment registered a modest 6% growth. “Factors contributing to this included supportive agricultural markets and bulk purchases, particularly for container movements. The festive season, featuring both Diwali and Dussehra, also stimulated demand, along with some recovery from September's slowdown due to rains. However, dealers faced challenges such as slow demand, sluggish construction activities, financial issues among customers and increased vehicle prices leading to higher EMIs. Overall, while there were areas of growth, the CV market faced headwinds that tempered its overall performance,” says FADA.

In its near-term outlook, FADA says the Indian auto industry is poised for continued robust retail performance through the end of the calendar year. “With an estimated 4.8 million weddings scheduled nationwide in November and December 2024, Indian retail is preparing for an unprecedented surge in demand for wedding-related goods and services. Vehicle purchases also traditionally witnesses an uptick during the wedding season,” it says.