Car Sales Struggle In November, But Opportunities For Recovery Loom Ahead; Details Here

According to FADA's data released on Monday, while the two-wheeler (15.8 per cent growth), three-wheeler (4.23 per cent), and tractor (29.88 per cent) segments showed positive results

Currently, inventory levels are around 65 to 68 days. FADA has urged original equipment manufacturers to rationalise their stock further to ensure the industry enters the new year on a stronger note

Source : PTI

The Indian car market remained subdued despite expectations of a strong performance in November. Data from the Federation of Automobile Dealers Associations (FADA) showed a 13.72 per cent decline in passenger vehicle retail sales compared to November 2023. This came despite the anticipated boost from the wedding season across much of the country and spillover registrations from Diwali in late October, which were expected to drive sales.

According to FADA's data released on Monday, while the two-wheeler (15.8 per cent growth), three-wheeler (4.23 per cent), and tractor (29.88 per cent) segments showed positive results, the passenger vehicle segment was a major concern. Additionally, the commercial vehicle sector also struggled, experiencing a 6.08 per cent year-on-year (YoY) decline.

Car sales in India dropped by 13.72 per cent YoY in November and saw a sharp 33.37 per cent decline compared to October. FADA attributes this slump to several factors, including weak market sentiment, a limited range of products, a lack of new launches, and the shifting of festive demand to October.

India's car market challenges are primarily concentrated in major urban areas. While rural demand has shown positive growth, more is needed to counter the underperformance in metropolitan cities and other Tier I and II locations.

Currently, inventory levels are around 65 to 68 days. FADA has urged original equipment manufacturers (OEMs) to rationalise their stock further to ensure the industry enters the new year on a stronger note.

Upcoming Outlook

December is expected to remain a tough month for carmakers, as the year's final month typically sees lower buyer demand. However, sales may gain some momentum due to discounts and offers from manufacturers and dealerships. Additionally, with price hikes scheduled for January 1, there could be a rush of buyers looking to purchase before the increase. 

Despite these factors, cautious optimism prevails. Many prospective car buyers are likely to delay their purchase plans until 2025, anticipating the arrival of newer models. Several car models are expected to be unveiled or launched at the Bharat Mobility Expo, which will take place in Delhi from January 17 to 22.