The Indian passenger vehicle (PV) segment saw a 1.36 percent drop in retail sales in October 2023 on a year-on-year basis, according to the Federation of Automobile Dealers Associations (FADA).
Last month, the auto industry collectively reported retail sales of 21,17,596 units, witnessing a decline of 8 per cent compared to 22,95,099 units sold in October 2022.
However, FADA claims that the numbers do not give an accurate insight into retail growth as the situation was not optimal. FADA President, Manish Raj Singhania said, "The month commenced under the shadow of the inauspicious Shraddh period, persisting until the 14th. Consequently, a YoY comparison may not accurately reflect the actual trajectory of growth in the Indian Auto Retail sector.”
“The PV segment navigated a complex landscape, marked by both enthusiasm and caution. During Navratri, despite regional variability, the industry witnessed a surge in bookings, buoyed by the introduction of compelling new models, particularly SUVs and the availability of attractive consumer offers. However, the impact of local elections and market saturation meant that the festive spirit didn't translate uniformly into sales across all regions," Singhania added.
However, wholesale numbers were up as industry carmakers dispatched around 3,91,472 units last month, the highest ever monthly sales in the history of the domestic PV market. On a year-on-year (YoY) basis, auto dispatches were up 16.3 percent from 3,36,679 units sold in October 2022, as per industry analysts.
Meanwhile, FADA gave mixed guidance for the auto sector.
“Festivities along with harvest season, especially paddy, are expected to boost two-wheeler sales, with optimism fuelled by new schemes and a push towards electrification, despite supply concerns,” the FADA statement said.
On inventory levels in the PV segment, the association said that high inventory levels of 63-66 days warranted urgent attention from OEMs.
“Without substantial interventions and if Diwali sales don't rise to the occasion, the weight of unsold stock could lead to significant dealer distress. It could lead to industry-wide repercussions. Therefore, the association called for the industry to take immediate and decisive action to manage the risk of a financial squeeze as the year comes to a close,” FADA said.