Marking a significant surge, automobile retail sales in India registered a 20 per cent spike for September reaching 1.89 million units as compared to the same period last year.

The data released by the Federation of Automobile Dealers’ Associations (FADA) showed the sales surged due to a positive market sentiment driven by favourable monsoon.

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All the automotive categories showed a surge in the sales for the period, except for tractors which witnessed a 10% decline.

How the categories performed?

FADA said the two-wheelers posted a robust growth of 22 per cent  , passenger vehicles saw a steady 19 per cent rise, and the commercial vehicles also reported a 5 per cent   growth.

Two-wheeler segment rose from 1.08 million units last year to 1.31 million units this year while the commercial vehicle sales increased from 77,054 units last year to 80,804 units this year. Passenger vehicle sales reached 332,248 units compared to 279,137 in September 2022.

Three-wheeler sales reached an all-time high in September marking a spike of 49%. For this period, 102,426 units of the vehicle were sold, marking a jump from the 68,937 units sold in the same month last year.

Importantly, this number surpassed the previous record set in August 2023, which stood at 99,907 units.

Speaking on the performance, President of FADA Manish Raj Singhania said, “With the introduction of new models and attractive promotional offers, demand increased, especially in rural areas, fostering improved market sentiments. This uptick in demand was accompanied by heightened customer walk-ins and an overall positive market response.”

Soaring inventory levels – A concern

According to the data, an area of concern for dealers is the soaring inventory levels. It has reached an all-time high of 60-65 days.

However, the industry is optimistic about the upcoming festive season, including Durga Puja and Navratri.

Speaking on the soaring inventory, the President said as we move past the Shraadh period on October 14, the market is poised for the onset of Navratri, heralding a 42-day festive window.

With these promising indicators, FADA adopts an optimistic stance, anticipating a thriving festive season for the Indian Auto Retail sector, he said.

“September’s auto retail celebrated a 20% year-on-year leap, continuing the momentum from the previous month while marking a 3.5% month-on-month increase, seamlessly transitioning into the festive period’s sweet spot set to unfold over the next 42 days,” FADA President added.