Auto Retail Sales Grow 18% To Reach Record High In Nov: FADA

The overall retail sales in November stood at 28,54,242 units, up by 18 per cent from 24,09,535 units recorded in the same period a year earlier. 

Providing an outlook on sales, the association said the industry faces challenges from the severe weather conditions affecting the rabi cultivation which could in turn affect rural incomes and weaken sales. 

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Automobile retail sales in India increased to a record high in November, helped by the best monthly performance logged by the passenger vehicle and two-wheeler segments, the Federation of Automobile Dealers Association (FADA) said on Wednesday. The overall retail sales in November stood at 28,54,242 units, up by 18 per cent from 24,09,535 units recorded in the same period a year earlier. 

Meanwhile, the passenger vehicle (PV) segment logged retail sales of 3,60,431 units, up by 17 per cent against 3,07,550 units in the corresponding period a year earlier, reported PTI. Two-wheeler registrations also increased by 21 per cent in the period to 22,47,366 units, against 18,56,108 units in November 2022, the dealers’ body noted.

FADA President, Manish Raj Singhania, stated, “November '23 has become a historic month for the Indian auto retail industry as 28.54 lakh vehicles were sold, thus overtaking the previous high of March '20 when the industry sold 25.69 lakh vehicles. Two-wheeler and passenger vehicle segments created new records last month.”

The association head noted that the two-wheeler segment logged sales of 22.47 lakh vehicles, up by 1.77 lakh vehicles against the previous high of March 2020, while the passenger vehicle segment saw sales of 3.6 lakh units, higher by 4,000 units against the previous high recorded in October 2022. 

Singhania stated that the PV sales in November were boosted by Deepawali and the launch of new and appealing models. “The improved supply chains, coupled with new launches, effectively catered to the festive demand, marking the peak point in sales. However, the period following the festivities saw a noticeable slowdown, coupled with a critical challenge of slow-moving inventory due to a mismatch in demand and supply, which is still not resolved,” he said. The executive called for strategic adjustments to be made in inventory management to solve the issues.

The two-wheeler sales were credited to increased demand in rural areas, new product launches, and better model supply. The sales in the three-wheeler segment stood at 99,890 units in November, logging a growth of 23 per cent against the corresponding period a year earlier.

Tractor sales, however, dipped by 21 per cent to 61,969 units in the reporting period, against 78,720 units in the same period a year earlier. Similarly, commercial vehicle sales also slipped by 2 per cent to 84,586 units on a year-on-year (YoY) basis. 

Providing an outlook on sales, the association said that the two-wheeler category is set to gain from the boost in liquidity, especially in rural areas and the ongoing wedding season, with about 38 lakh marriages expected to increase vehicle sales. At the same time, the industry faces challenges from the severe weather conditions affecting the rabi cultivation which could in turn affect rural incomes and weaken sales. 

However, the association noted that the commercial vehicle (CV) category is poised to see recovery, helped by renewed business activities after elections and positive sentiment in major sectors like cement and coal.

The current PV inventory, which is still above 60 days, underplays the need for Original Equipment Manufacturers (OEMs) to categorically lower dispatches of slow-moving vehicles, specially in the entry-level category. The body further said, “Historically, it is recognised that holding inventory beyond 30 days starts to erode dealer profitability as the financial burden is intensified by the high interest costs of inventory funding from financial institutions.”

FADA represents more than 15,000 automobile dealerships with more than 30,000 outlets spread across the country.