Prajakta Chavan Rane

Mumbai

After witnessing a slight dip in the first half of the October month, the auto sales attained double-digit month-on-month (MoM) growth as the festivities began. The first half of October 23 saw a slowdown in auto sales owing to the ‘Shraddh period’ considered inauspicious to make any new purchase or investment. However, with the commencement of Navratri, auto sales registered nearly 13 per cent growth compared to September 2023.

With the beginning of festivities, all automotive categories experienced momentum. Notably, two-wheelers (2W), three-wheelers (3W), passenger vehicles (PV), tractors (Trac), and commercial vehicles (CV) grew by 15%, 2%, 7%, 15%, and 10% respectively on an MoM basis. The statistics for October 23, the corresponding period last year and last month were shared by the Federation of Automobile Dealers Associations (FADA) as they surveyed and collated All India Vehicle Retail Data.

Commenting on October 2023 Auto Retails, FADA President, Manish Raj Singhania said, “The month commenced under the shadow of the inauspicious Shraddh period, persisting until the 14th. Consequently, a YoY comparison may not accurately reflect the actual trajectory of growth in the Indian Auto Retail sector. When compared to MoM, Auto Retails flourished, achieving a 13% increase, with contributions from all categories”.

The highest 14.91 per cent MoM growth is noticed in the two-wheeler category, while September 23 saw sales of 13.12 lakh bikes, and October 23 witnessed sales of 15.07 two-wheelers. This was followed by a tractor which registered sales growth of 14.51 per cent compared to last month. The October 23 witnessed sales of 62,440 tractors against
54, 492 in the last month.

Enhanced availability of models, especially those in high demand from the previous year, along with better financial schemes, contributed to a solid market momentum. States going into elections also injected optimism into the market, leading to an increase in government spending and improved liquidity.

“Despite a shift in festival dates, with Diwali moving to November, the anticipation of the festive season stimulated purchase intent and dealers reported good stock preparation and robust ground efforts that led to an uptick in sales figures, showcasing a resilient and adaptive market,” Singhania added.

The survey indicated yet another positive trend among electric vehicles, as there has been a significant increase in the demand for E-rickshaws compared to last year. Thus, signalling a healthy move towards electrification. The E-rickshaw passenger sales have gone up by 44.67 per cent from 31, 613 in October 22 to 45, 734 in October 23.

With a marginal increase of 6.54 per cent MoM basis, the passenger vehicle segment remains a critical concern for the auto industry. Thus raising a red flag, FADA has urged Original Equipment Manufacturers to not only moderate vehicle dispatches but also to introduce more aggressive and attractive schemes promptly. “This dual approach is essential to help dealers clear their inventory before year-end, averting the potential financial repercussions associated with excess unsold stock,” as mentioned in the FADA release.

On the other hand, commercial vehicles (CV) witnessed year-on-year (YoY) growth of 10.26 per cent, and 9.77 per cent on an MoM basis. The CV segment experienced robust bookings and a positive uptake in retail sales, buoyed by festive cheer and strategic price support from manufacturers. The demand for light and small commercial vehicles surged, driven by infrastructure development activities and the need for vehicle replacement. “Healthy demand was witnessed especially in segments like cement, iron ore, and coal transport. The festive seasons, including Navratri, catalysed market activity, with customers taking advantage of favourable finance schemes,” concluded Singhania.

Box

Chart showing Vehicle Retail Data for Oct’23

All India Vehicle Retail Data for Oct’23

Resource: Federation of Automobile Dealers Associations