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India's overall auto sales witnessed a strong 32 per cent year-on-year (YoY) growth in October, with the two-wheeler segment leading the surge, according to a report by the Federation of Automobile Dealers Associations (FADA) released on Wednesday.
The report noted that the all major vehicle categories showed positive growth, highlighting a vibrant festive season and robust rural demand as key drivers. It said "October 2024 retail sales witnessed a significant growth of 32 per cent YoY and 64 per cent MoM". It highlighted that the Two-wheeler (2W) sales experienced an impressive 36 per cent YoY growth, benefiting from the convergence of major festivals like Navratri and Diwali, which significantly boosted consumer demand. FADA noted that the surge in two-wheeler sales was further propelled by attractive festive offers, new model launches, and improved stock availability. As per report, rural demand played a pivotal role in the growth of two-wheeler sales, supported by the increased Minimum Support Price (MSP) for Rabi crops, which strengthened farmers' purchasing power. The passenger vehicle (PV) segment also recorded a strong performance, with sales increasing by 32 per cent YoY. This growth was primarily driven by the high demand during the festive season, aggressive discount offers, and new model launches, especially in the SUV category. However, high dealer inventory levels, ranging from 75 to 80 days, have raised concerns about continued discounting through the year-end to manage stock. In the Commercial vehicle (CV) segment, the sales data showed modest growth of 6 per cent YoY, supported by increased agricultural demand and bulk orders for container movements. The festive season did boost sales in this category, but the growth was somewhat limited due to challenges like sluggish construction activities and higher vehicle prices, which affected overall demand. Three-wheeler (3W) and tractor (Trac) sales also grew, with 11 per cent and 3 per cent YoY increases, respectively, as demand for mobility and agricultural support remained steady. Looking forward, the report highlighted that the auto industry remains optimistic about near-term growth, with the upcoming wedding season expected to further boost sales. However, FADA cautioned that potential challenges, such as inventory overstock and broader economic uncertainties, could slow momentum toward the end of the year. The industry may face increased pressure to offer discounts to manage stock levels and maintain sales as it moves into the final quarter. The industry now eyes the rest of the year with cautious optimism, balancing potential sales opportunities with the challenges posed by inventory and economic factors. (ANI)
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