In a remarkable surge, Indian automobile retail sales in September showed a 20% increase compared to the same period last year, reaching a total of 1.89 million units. This growth was driven by a positive market sentiment fuelled by favourable monsoon conditions, as reported by the Federation of Automobile Dealers' Associations (FADA).

With the exception of tractors, which experienced a 10% decline in sales, all other automotive categories witnessed significant growth. Two-wheelers saw a robust 22% increase, three-wheelers soared by 49%, passenger vehicles experienced a steady 19% rise, and commercial vehicles also reported a 5% growth. Notably, three-wheeler sales reached an all-time high in September, totalling 102,426 units, surpassing the previous record set in August 2023 at 99,907 units.

However, a concerning issue for dealers was the soaring inventory levels, reaching an all-time high of 60-65 days. Despite this, the industry remains optimistic about the upcoming festive season, including Durga Puja and Navratri.

Manish Raj Singhania, President of FADA, expressed optimism about the industry's performance, stating, ?September?s auto retail saw a 20% year-on-year leap, continuing the momentum from the previous month and marking a 3.5% month-on-month increase, seamlessly transitioning into the festive period?s sweet spot set to unfold over the next 42 days.?

During this period, the two-wheeler segment experienced a rise from 1.08 million units last year to 1.31 million units this year. Singhania attributed this growth to the introduction of new models and attractive promotional offers, particularly in rural areas, leading to improved market sentiments. He also noted better stock availability compared to the previous year and a positive response to newly launched entry-level products, setting an optimistic tone for the upcoming festive season.

September 2023 also showcased a resilient commercial vehicles segment, with noticeable demand in coal, cement, and general market load sectors. The passenger carrier segment also experienced an uptick, attributed to the central government's funding for infrastructure development, fostering bulk deals, especially in tippers and government sectors. Commercial vehicle sales increased from 77,054 units last year to 80,804 units this year, indicating a revitalised tourism market and increased market sentiment post-Covid.

The passenger vehicle (PV) category witnessed a stimulating resurgence due to improved vehicle availability and the influx of new and refreshed models from various original equipment manufacturers (OEMs). This growth was supported by enhanced supplies and a diverse product portfolio catering to changing consumer demands. PV sales reached 332,248 units compared to 279,137 in September 2022.

?With PV inventory reaching an unprecedented 60-65 days threshold, it's crucial for OEMs to proceed cautiously, avoiding excessive inventory pushes to ensure a vibrant and stable market during the festive season,? said Singhania. ?As we move past the Shraadh period on October 14, the market is poised for the onset of Navratri, heralding a 42-day festive window. With these promising indicators, FADA maintains an optimistic stance, anticipating a thriving festive season for the Indian Auto Retail sector.?

Source: Business Standard