Indian automakers see best Navratri sales in six years — but FADA cautious on high inventory

According to the FADA report, the two-wheeler category during the Navratri period and throughout October saw festive cheer and stronger rural demand. “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,” the auto body said.

The passenger vehicle segment, meanwhile, witnessed enthusiasm as well as caution. During Navratri, despite regional variability, the industry witnessed a surge in bookings, buoyed by the introduction of compelling new models, particularly SUVs and the availability of attractive consumer offers. However, the impact of local elections and market saturation meant that the festive spirit didn't translate uniformly into sales across all regions, FADA said.

According to the dealers’ association, the near-term outlook for the auto sector is a blend of highs and lows. Festivities along with harvest season (especially paddy) are expected to boost two-wheeler sales, with optimism fuelled by new schemes and a push towards electrification, despite supply concerns. CVs are looking at a strong November, with festive and construction activities enhancing demand, alongside anticipated financial schemes, it said.

However, the passenger vehicle segment is navigating through a tricky phase. Festive days might spike bookings, yet the shadow of year-end discounts looms over immediate sales.

FADA cautioned that high inventory levels in PVs, at a critical 63-66 days range, demand urgent attention from OEMs.

“Without substantial interventions and if Diwali sales don't rise to the occasion, the weight of unsold stock could lead to significant dealer distress, echoing FADA's concerns for potential industry-wide repercussions. Immediate and decisive action is imperative to counter the risk of a financial squeeze as the year closes,” the auto body said.