Indian automotive retail sector saw robust growth in the month of September. According to recent data by the Federation of Automobile Dealers Associations (FADA) auto sales grew 20% year-on-year (YoY).
The report highlighted that, except for the tractor segment, which experienced a 10% de-growth, all other categories exhibited significant growth.
Two-wheelers led the charge with a 22% increase in sales, followed closely by three-wheelers at 49%. Passenger vehicles (PV) saw a healthy growth of 19%, while commercial vehicles (CV) also contributed to the positive trend with a 5% increase.
Despite the monthly fluctuations, the automotive retail industry experienced positive month-over-month (MoM) dynamics, recording a 3.5% growth in total auto retail sales. However, here too, the tractor segment continued to face challenges, witnessing a 26% contraction MoM.
Compared to the pre-pandemic period, the retail landscape displayed a 14% growth, signalling a healthy recovery for the industry. Notably, the two-wheeler category showed signs of a turnaround in rural markets, posting a growth of 2%, hinting at increased consumer confidence.
The three-wheeler segment maintained its momentum, setting consecutive all-time high retail records. Sales for September peaked at 1,02,426 units, marking a 49% YoY and 5% MoM growth, crossing the 1 Lakh unit mark.
One notable concern highlighted in the report was the unprecedented inventory levels for passenger vehicles, which reached the 60-65 days threshold, marking an all-time high. Dealers anticipated a bumper 42-day festive period, leading to this increase in inventory.
On a positive note, September's rainfall patterns alleviated India's drought fears, with the country receiving 94% of expected rains. The India Meteorological Department (IMD) forecasts a 'normal' north-east monsoon for the October to December period, providing further optimism for the agriculture-dependent rural markets.
As the festive season approaches, FADA has shifted its stance from "cautiously optimistic" to "optimistic."
The Shraadh period until October 14, will be followed by the nine days of Navratri commencing from October 15. With monsoon worries dispelled and positive growth indicators, FADA anticipates a vibrant festive season for auto retail in India, further boosting the industry's recovery.
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