Retail sales of vehicles across categories in India grew by 11.21% at 32,08,719 units in November, as compared to 28,85,317 units in the same month last year riding on two-wheeler demand, Federation of Automobile Dealers Associations said on Monday (December 9, 2024).

Retail sales of two-wheelers were at 26,15,953 units last month, as compared to 22,58,970 units in November 2023, a growth of 15.8% buoyed by the festive spillover.

On the other hand, passenger vehicle (PV) retail was down 13.72% at 3,21,943 units, as against 3,73,140 units in the year-ago month. The PV segment faced notable headwinds, Federation of Automobile Dealers Associations (FADA) said in a statement.

“While November was initially expected to build on its prior momentum, particularly due to the marriage season, dealer feedback suggests that this segment underperformed overall expectations,” FADA President, C.S. Vigneshwar said in a statement.

He further said, “although rural markets offered some support, primarily in the two-wheeler category, marriage-related sales remained subdued.” The late occurrence of Deepawali at the end of October also caused a spillover of festive registrations into November, affecting the month’s sales trajectory, Mr. Vigneshwar added.

On PV retail, he said, “dealers cited weak market sentiment, limited product variety and insufficient new launches, compounded by the shift of festive demand into October.” Mr. Vigneshwar further said, “although rural interest was present, it failed to significantly improve sentiment. Inventory levels have reduced by about 10 days, but to remain high at around 65-68 days.” He reiterated FADA’s request to Original Equipment Manufacturers (OEMs) to further rationalise inventory so that the industry can enter the new year on a healthier footing, reducing the need for additional discounts.

In the commercial vehicles segment, FADA said retail sales were at 81,967 units last month as compared to 87,272 units in November 2023, down 6.08%.

Mr. Vigneshwar said factors such as restricted product choices, older model issues, limited financier support, and the absence of major festivals in November following a strong October impacted CV uptake.

“External elements such as elections, a slowdown in coal and cement industries, and weak market sentiment also weighed heavily on this category,” he added.

FADA said three-wheeler sales in November were at 1,08,337 units, as against 1,03,939 units in the year-ago month, up 4.23%.

On the overall near-term outlook, FADA said, “while the near-term outlook for December is not overwhelmingly strong across segments, it leans towards stability with pockets of potential growth, underlining a sentiment that overall remains cautiously optimistic.” With prospects of a bumper Kharif harvest likely to temper food inflation, the broader macroeconomic environment appears set to improve, potentially aiding consumer sentiment in the months ahead. However, the immediate December outlook derived from dealer feedback is mixed, it added.

In the two-wheeler segment, FADA said, “dealers suggest that while some buyers remain hesitant’ either awaiting new-year models or influenced by subdued post-festive sentiment’ others could be drawn by potential year-end discounts and stable rural demand.” As for the PV category, heavy discounting and improved product availability are expected to help offset weak consumer sentiment and a general year-end lull.

“While some customers are deferring purchases for new-year models, overall interest could pick up due to aggressive offers and end-of-year promotions.

“This sets a tone of cautious optimism, with a moderate chance of improved sales compared to November,” it added.

Passenger vehicle registrations dipped to 3,03,358 units last month, compared with 3,35,123 units in May 2023. File
| Photo Credit: V. V. Krishnan

Domestic passenger vehicle retail sales declined 1% year-on-year in May, as blistering summer heat and elections impacted demand, automobile dealers’ body FADA said on June 10.

Passenger vehicle registrations dipped to 3,03,358 units last month, as compared with 3,35,123 units in May 2023.

“Dealers cited the impact of elections, extreme heat and market liquidity issues as major factors for the dip in sales last month,” the Federation of Automobile Dealers Associations (FADA) President Manish Raj Singhania said.

Despite better supply, some pending bookings and discount schemes, the lack of new models, intense competition and poor marketing efforts by original equipment manufacturers (OEMs) also affected sales, he added.

Additionally, the month saw increased customer postponements and low enquiries, Mr. Singhania stated. Due to the extreme heat, the number of walk-ins to showrooms dropped by around 18%, he said.

Two-wheeler, three-wheeler sales rise

Two-wheeler sales rose 2% to 15,34,856 units in May, as against 14,97,778 units in the same month last year.

Mr. Singhania said positive rural demand on account of good rains in some regions and improved finance availability kept the counters ticking.

Three-wheeler retails rose 20% year-on-year to 98,265 units last month. Commercial vehicle sales increased by 4% at 83,059 units last month, as compared to 79,807 units in May 2023.

“Despite growth due to a low base from last year and increased bus orders, the industry faced challenges due to wholesale pressures, government policy effects, and negative market sentiment,” Mr. Singhania said.

‘Cautiously optimistic’ near-term outlook

He noted that the near-term outlook for automobile retail is ‘cautiously optimistic’, influenced by a mix of positive and challenging factors across various segments.

Government formation is expected to bring stability and improve market sentiment, he said. Dealers are hopeful about better supplies and positive movement in key sectors like cement, coal and iron ore, he added.

Above-normal rains during monsoon is expected to enhance rural demand and support economic activities, Mr. Singhania said, but warned that “extreme weather, such as heatwaves and heavy rains, along with the reopening of schools in July, might delay purchase decisions.”

Challenges persist, including intense competition, lack of new model launches and poor marketing efforts by OEMs, he said.

FADA, which represents over 15,000 automobile dealerships, collated sales data from 1,360 out of 1,503 RTOs across the country.

Passenger vehicle sales rose to 3,93,250 units last month, registering a jump of 13% from 3,47,086 units sold in January 2023.
| Photo Credit:
PTI

“Passenger vehicle retail sales rose to a record high in January driven by robust demand for sports utility vehicles,” dealers’ body FADA said on February 13. Passenger vehicle (PV) sales rose to 3,93,250 units last month, registering a jump of 13% from 3,47,086 units sold in January 2023.

“SUV demand along with the introduction of new models, greater availability, effective marketing, consumer schemes and the auspicious wedding season underpinned this strong performance,” Federation of Automobile Dealers Associations (FADA) President Manish Raj Singhania said in a statement.

“Despite record sales, serious concerns remain regarding PV inventory level which is now in the 50-55 day range,” he added. “This calls for immediate recalibration of production from OEMs to better align with actual market demand and avoid future oversupply issues,” Mr. Singhania said.

“The OEMs (original equipment manufacturers) must balance innovation with strategic production planning to ensure sustained success and overall market stability,” he noted. Two-wheeler sales increased 15% year over year to 14,58,849 units in January as compared to the sales during the same period last year.

“Improved vehicle availability, due to adjustments post-OBD 2 norm implementation, the introduction of new models and a shift towards premium options all contributed to increased demand,” Mr. Singhania said.

“This, combined with a good harvest, a positive marriage season and effective follow-ups and offers, indicate a favourable trajectory for the two-wheeler sector,” he added. The commercial vehicle sales witnessed flat sales growth last month at 89,208 units.

Three-wheeler retail sales, however, saw an increase of 37% to 97,675 units from 71,325 units in January 2023. Tractors sales rose 21% year over year to 88,671 units in January. Overall retail sales last month stood at 21,27,653 units, up 15% from 18,49,691 units in January 2023.