The Federation of Automobile Dealers Associations (FADA) has reported robust growth in auto retail sales for October 2024, with an impressive year-on-year (YoY) increase of 32% and a month-on-month (MoM) surge of 64%. The growth, propelled by a strong festive season and increased demand in rural markets, was observed across all segments, with two-wheelers (2W) up 36%, passenger vehicles (PV) up 32%, commercial vehicles (CV) up 6%, tractors (Trac) up 3%, and three-wheelers (3W) up 11% YoY.
The report highlighted that October’s convergence of major festivals, such as Navratri and Diwali, spurred consumer demand. Festive offers, improved stock availability, and new model introductions were key drivers, particularly in the 2W and PV segments. Rural markets, bolstered by favorable crop yields and increased Minimum Support Prices (MSP) for Rabi crops, significantly boosted two-wheeler and PV sales.
Segment Highlights
- Two-Wheelers: Recorded a 36% YoY and 71% MoM growth, thanks to strong rural demand, attractive festive discounts, and an array of new launches. Positive rural sentiments, driven by good monsoons and favorable crop expectations, further fueled growth.
- Passenger Vehicles: Saw a 32% YoY and 75% MoM increase as festive demand spiked. The SUV segment remained particularly popular; however, dealer inventory levels were high, reaching 75-80 days, raising concerns about potential overstock and prolonged discounting.
- Commercial Vehicles: Reported a modest 6% YoY growth, supported by demand from agriculture and bulk purchases for container movements. However, slow construction activity and rising vehicle costs tempered growth in this segment.
Outlook for the Coming Months
FADA forecasts continued demand strength in the 2W and PV segments, spurred by the upcoming wedding season, with an estimated 4.8 million weddings in November and December expected to further fuel auto sales. Rural markets are anticipated to remain buoyant, driven by good crop yields and positive sentiment.
However, FADA advised caution over potential challenges, especially in the PV and CV segments. High PV inventory levels may require OEMs to rationalize supply, and CV dealers are wary of slowing demand due to financial constraints and a likely post-festive season dip.
While the auto industry remains optimistic about growth in the near term, FADA emphasized the importance of careful inventory management as economic uncertainties loom towards the year’s end.
