The Federation of Automobile Dealers Associations (FADA) has unveiled the Vehicle Retail Data for November 2023, marking a historic month for the Indian Auto Retail Industry. With insights from FADA President, Manish Raj Singhania, the report reveals remarkable achievements and challenges across various vehicle categories.
In a significant milestone, the month of November 2023 witnessed the sale of 28.54 lakh vehicles, surpassing the previous highs of March 2020 during the BS-4 to BS-6 transition, when 25.69 lakh vehicles were sold. Both the two-wheeler (2W) and passenger vehicle (PV) segments set new records, with 22.47 lakh 2Ws and 3.6 lakh PVs sold, showcasing an increase compared to previous highs.
Commenting on the numbers, Singhania highlighted a year-on-year (YoY) growth of 18% and a month-on-month (MoM) growth of 35%. While 2W, three-wheeler (3W), and PV categories demonstrated growth rates of 21%, 23%, and 17% respectively on a YoY basis, tractors (Trac) and commercial vehicles (CV) experienced a decline of 21% and 2% YoY.
The 2W category experienced a boost in auto retail, reaching an all-time high, attributed to festive excitement around Deepawali, robust rural sentiments, new product launches, and improved model supply. Electric vehicle sales also showcased positive momentum.
In contrast, the CV category faced challenges due to poor market sentiment, seasonal slumps, unseasonal rains impacting crops and transport demand, liquidity issues, delayed deliveries, and elections in some states.
The PV category exhibited a robust surge, fueled by Deepawali celebrations and the introduction of attractive new models. However, challenges emerged post-festivities, including a slowdown and slow-moving inventory, emphasizing the need for strategic adjustments in inventory management.
Near term outlook:
In the near term, the 2W category is expected to benefit from increased liquidity, particularly in agricultural regions and the ongoing marriage season. However, challenges loom with potential impacts on rural incomes due to severe weather conditions affecting rabi cultivation.
The CV category anticipates recovery post-elections, driven by renewed business activities and positive movements in key sectors like cement and coal.
The PV sector holds growth potential with year-end offers, discounts, improved vehicle supply, and new product launches. However, challenges include a preference for 2024-manufactured vehicles and a slowdown in demand post-festivities.
While opportunities exist with new product launches and seasonal demands, the Indian Auto Retail industry must navigate through a complex landscape of consumer preferences, high inventory in the PV category, and external economic factors, including potential inflation impacts on vehicle sales in the near term. Strategic adjustments in inventory management and a keen focus on consumer dynamics will be crucial for sustained success in this dynamic market.