In a noteworthy upswing, Indian automobile retail sales for September have recorded a 20 per cent increase compared to the same period last year, reaching a total of 1.89 million units. This surge in sales can be attributed to a positive market sentiment driven by favourable monsoon conditions, as reported by the Federation of Automobile Dealers’ Associations (FADA).
Category-wise Performance
Two-Wheelers: Two-wheeler sales posted a robust 22 per cent increase, particularly driven by the introduction of new models and attractive promotional offers. Demand saw a significant uptick, especially in rural areas, leading to improved market sentiments.
Three-Wheelers: The three-wheeler segment witnessed an impressive 49 per cent growth, reaching an all-time high in September with 102,426 units sold. This surpasses the previous record set in August 2023.
Passenger Vehicles: Passenger vehicles experienced a steady 19 per cent rise, thanks to improved vehicle availability and an influx of new and refreshed models from various OEMs. Sales reached 332,248 units, a substantial increase from September 2022.
Commercial Vehicles: Commercial vehicle sales also showed resilience, driven by demand in coal, cement, and the general market load sectors. Sales increased from 77,054 units last year to 80,804 units this year, indicating a revitalised tourism market.
Tractors: Tractors were the only category to witness a decline in sales, with a 10 per cent drop.
Concerns Regarding Inventory Levels
One area of concern for dealers is the soaring inventory levels, which reached an all-time high of 60-65 days. Managing inventory levels will be crucial for maintaining market stability.
Optimism for the Upcoming Festive Season
The Indian automobile industry remains optimistic about the upcoming festive season, including Durga Puja and Navratri. September’s strong performance is seen as a seamless transition into the festive period, with the next 42 days expected to be a “sweet spot” for the industry.
Government Support and Infrastructure Development
The positive trends observed in commercial vehicle sales can be attributed to the central government’s allocation of funds towards infrastructure development, leading to bulk deals, especially in tippers and government sectors. This support has contributed to the growth in commercial vehicle sales.
Caution for OEMs
While the industry is optimistic, caution is advised for OEMs to avoid excessive inventory pushes, considering the unprecedented 60-65 days threshold for passenger vehicle inventory. Striking a balance between supply and demand will be essential for a vibrant and stable market during the festive season.
