Indian Auto Sales Jumped 20% in September, Except for Tractors

In a remarkable turnaround, India's automobile retail sector witnessed a 20% surge in sales for September compared to the same period last year, with a total of 1.89 million units sold. This surge comes amid a positive market sentiment driven by favourable monsoon conditions, as reported by the Federation of Automobile Dealers Associations (FADA).

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While the overall automotive market flourished, tractor sales experienced a 10% decline. However, all other categories displayed significant growth, with two-wheelers posting a robust 22% increase, three-wheelers soaring by an impressive 49%, passenger vehicles enjoying a steady 19% rise, and commercial vehicles also reporting a 5% growth. Notably, three-wheeler sales reached an all-time high in September, with 102,426 units sold, surpassing the previous record set in August 2023, which stood at 99,907 units.

One area of concern for dealers is the mounting inventory levels, which have reached an all-time high of 60-65 days.

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Despite this, the industry remains optimistic about the upcoming festive season, including Durga Puja and Navratri. Manish Raj Singhania, President of FADA, commented, "September’s auto retail celebrated a 20% year-on-year leap, continuing the momentum from the previous month while 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."

In the two-wheeler segment, sales rose 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, especially in rural areas. He also noted that improved stock availability compared to the previous year and a positive response to newly launched entry-level products bode well for the upcoming festive season.

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September 2023 showcased resilience in the commercial vehicles segment, with notable demand in coal, cement, and the general market load sectors. The passenger carrier segment also experienced an uptick, driven by infrastructure development initiatives and bulk deals in sectors like tippers and government contracts. Commercial vehicle sales increased from 77,054 units last year to 80,804 units this year.

The passenger vehicle category saw a resurgence, supported by increased vehicle availability and the launch of new and refreshed models. Sales reached 332,248 units compared to 279,137 in September 2022.

As the inventory for passenger vehicles reaches an unprecedented 60-65 days, Singhania emphasized the need for caution among original equipment manufacturers (OEMs) to avoid excessive inventory build-up. Nevertheless, with promising indicators and the festive season on the horizon, the Indian Auto Retail sector is poised for a thriving festive season, according to FADA.

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