Passenger vehicle inventory may push discounts, FADA warns.
MUMBAI, Nov 6 (The CONNECT) – The festive month of October did not disappoint the auto business.
The overall retail sales grew by 32% YoY and 64% month-on-month with all categories showing positive growth, said C S Vigneshwar, president of Federation of Auto Dealers Associations (FADA)
Sales of 2W were up 36%, 3W up 11%, PV up 32%, tractors up 3% and CV registered 6% growth YoY.
The rural market once again played a leading role in driving growth, particularly in the 2W and PV segments. Additionally, the Government’s announcement of an increase in the Minimum Support Price (MSP) for Rabi crops further boosted market sentiments, Vigneshwar said.
In the 2W segment, sales surged by 36% YoY and an impressive 71% MoM. The coincidence of major festivals in the same month spurred consumer purchasing. Dealers reported that attractive festive schemes, discounts and new model launches significantly stimulated customer interest.
Enhanced stock availability and better vehicle supplies from manufacturers enabled dealers to meet the increased demand. Positive rural sentiments, aided by favourable monsoons and crop expectations, also contributed to the strong performance.
Overall, the combination of festive celebrations, promotional offers and positive market conditions led to an exceptional month for 2W dealers, FADA said.
The passenger vehicle segment experienced growth of 32% YoY and 75% MoM. This impressive performance was again driven by the festivals coinciding in October, boosting consumer purchasing. Dealers highlighted that aggressive offers, attractive schemes and new model introductions further stimulated demand. Enhanced vehicle availability and strong market interest, especially for SUVs and new products, also contributed to the exceptional sales.
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Celebration time @Honda, Hyundai
Honda Cars India Ltd. (HCIL), leading manufacturer of premium cars in India, registered total sales of 10,080 units in Oct’2024. Domestic sales of the company stood at 5,546 units and exports at 4,534 units in the month of Oct’24.
Kunal Behl, Vice President, Marketing & Sales, Honda Cars India Ltd. said, “The festive sales momentum in October with Navratra, Durga Puja, Dussehra, Dhanteras and Diwali celebrated in same month contributed strongly to the customer deliveries at the dealerships. It surely revitalized demand compared to previous few months of muted activity for the industry. Our dispatches and deliveries aligned with our expectations. Our focused approach to aligning production and inventory with demand positions us well to sustain this momentum.”
The company had registered 9,400 units in domestic sales and exported 3,683 units in October’23.
Hyundai Motor India Limited (HMIL), registered total sales of 70,078 units (Domestic: 55,568 units and Exports: 14,510 units) in October 2024, achieving both its 3rd highest domestic sales and 3rd highest monthly total sales numbers since inception. HMIL achieved total (Domestic plus Exports) YTD sales (Jan-Oct 2024) of 6,47,789 units.
Tarun Garg, Whole-time Director and Chief Operating Officer, HMIL said, “We witnessed a strong demand for our SUV portfolio during festive period, leading to our highest-ever monthly SUV sales at 37,902 units, including highest ever monthly domestic sales of the Hyundai CRETA at 17,497 units. SUVs remain a cornerstone of our lineup, representing an impressive 68.2% of our total monthly sales in October 2024, with similar penetration in urban as well as rural markets. This strong demand underscores the broad appeal of our SUV line-up and our commitment to delivering quality and performance to all our customers. We continue to bolster our CNG penetration and HMIL’s innovative Hy-CNG technology has helped us achieve highest ever CNG sales volume of 8,261 units thereby contributing 14.9% to domestic sales volume in October 2024. We wish all our customers joyous festivities.”
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Despite strong sales, PV OEMs continue to heavily stock dealers, resulting in inventory levels decreasing by only five days, with overall inventory still at a high of 75–80 days.
This may thus lead the season of substantial discounts to continue until the end of the calendar year, FADA cautioned.
The commercial vehicle segment registered a modest 6% YoY growth. Factors contributing to this included supportive agricultural markets and bulk purchases, particularly for container movements.
Near-Term Outlook
Looking ahead, FADA said, the Indian auto industry is poised for continued robust retail performance through the end of the calendar year. With an estimated 4.8 million weddings scheduled nationwide in November and December 2024, Indian retail is preparing for an unprecedented surge in demand for wedding-related goods and services.
Vehicle purchases also traditionally witnesses an uptick during the wedding season, and FADA anticipated that this will translate into strong sales in both, the 2W and PV segments in the near term.
In the 2W category, positive factors such as good crop yields, favourable rural sentiments and the upcoming marriage season are expected to drive demand. In the CV segment, while supportive agricultural markets and continued bulk purchases may contribute positively, dealers remain vigilant due to factors like sluggish construction activities, financial constraints among customers and an anticipated decrease in demand post-festivities. For PV, the marriage season and ongoing promotional offers are expected to sustain demand. Yet, there are apprehensions about potential slowdowns caused by customers postponing purchases in anticipation of better year-end discounts. FADA also urges, PV OEMs to further rationalise supply.
