Vehicle Sales in India Grow 11.21% in November, Led by Two-Wheelers

Retail vehicle sales across all categories in India grew by 11.21% in November, totaling 32,08,719 units, compared to 28,85,317 units in the same month last year, according to the Federation of Automobile Dealers Associations (FADA).

This growth was primarily driven by a strong demand for two-wheelers, which saw a notable increase of 15.8%, reaching 26,15,953 units, up from 22,58,970 units in November 2023. The festive spillover played a crucial role in boosting sales in the two-wheeler segment.

However, passenger vehicle (PV) retail sales saw a decline of 13.72%, totaling 3,21,943 units, compared to 3,73,140 units in the same period last year. FADA noted that the PV segment faced significant challenges, despite initial expectations for strong sales, particularly due to the ongoing marriage season.

C. S. Vigneshwar, President of FADA, explained that while rural markets provided some support, particularly for two-wheelers, sales in the marriage season remained subdued. He also pointed to the delayed occurrence of Deepawali at the end of October, which caused a spillover of festive registrations into November, impacting the month's sales trajectory.

Vigneshwar further highlighted that weak market sentiment, limited product variety, and a lack of major new launches contributed to the underperformance in the PV segment. Additionally, the shift in festive demand to October, combined with high inventory levels, also weighed on the market.

In terms of commercial vehicles (CV), retail sales fell by 6.08%, with 81,967 units sold in November compared to 87,272 units last year. Several factors, including limited product choices, older models, and restricted financing support, contributed to this decline. Moreover, external elements such as elections, a slowdown in industries like coal and cement, and general market weakness also had an adverse effect on CV uptake.

On a positive note, the three-wheeler segment saw a modest growth of 4.23%, with 1,08,337 units sold in November, up from 1,03,939 units in the previous year.

Outlook for December: Cautious Optimism

Looking ahead, FADA expressed a cautiously optimistic outlook for the near-term future, with a stabilizing market expected in December. While sales may not experience overwhelming growth, pockets of potential growth are expected across various segments, particularly driven by year-end discounts and promotions.

The two-wheeler segment may see some hesitancy as buyers await new models, but the appeal of year-end discounts and stable rural demand could drive further sales. Similarly, for the PV category, aggressive discounting and improved product availability are expected to counter the weak consumer sentiment and year-end lull.

FADA emphasized that the broader macroeconomic environment could improve in the coming months, potentially boosting consumer sentiment, especially with the expected bumper Kharif harvest likely to temper food inflation. Despite mixed dealer feedback for December, there is hope for moderate improvement in sales compared to November.

Key Insights:

• Two-wheeler demand surged by 15.8%, buoyed by festive spillover.
• Passenger vehicles faced a 13.72% dip in retail sales, attributed to weak market sentiment and limited product variety.
• Commercial vehicle sales declined by 6.08%, impacted by external factors.
• Three-wheeler segment saw a slight increase of 4.23%.
• Dealers express cautious optimism for December, driven by potential discounts and stable rural demand.

FADA’s insights reflect the ongoing challenges in the automobile industry, but also hint at potential growth opportunities as the year concludes.