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In November 2023, India witnessed an extraordinary surge in automobile retail sales, setting a historic record. The Federation of Automobile Dealers Associations (FADA) reported an overall retail sale of 28.54 lakh units, marking an impressive 18% increase from the previous year.
The passenger vehicle segment saw a substantial rise, reaching 3.6 lakh units, an encouraging 17% growth from the corresponding period in the previous year. This spike was attributed to the festive season, the launch of appealing models, and Diwali-driven demand.
Two-Wheeler Records
Two-wheeler registrations soared by 21%, reaching an impressive 22.47 lakh units, surpassing the previous high recorded in March 2020 by a significant margin. This increase was bolstered by rural demand, new launches, and improved model availability.
Both segments achieved their highest-ever monthly sales, emphasizing the robust momentum in the industry during November 2023.
Despite this surge, challenges emerged post-festivities, primarily due to slow-moving inventory and a mismatch between supply and demand. This issue requires strategic adjustments in inventory management for sustainable growth.
Sectoral Performance
While three-wheeler retail sales witnessed a notable 23% rise, tractor sales faced a decline of 21%. Commercial vehicle retail sales also experienced a modest 2% dip, influenced by factors such as seasonal slumps and liquidity issues.
The immediate future holds promise for the two-wheeler segment, expected to benefit from rural liquidity and the ongoing marriage season, but potential setbacks might arise due to adverse weather impacting rural incomes. The commercial vehicle category anticipates a recovery post-elections, while the passenger vehicle sector eyes growth through year-end offers, discounts, and improved supply.
Industry Suggestions
FADA recommends OEMs to strategically manage inventory, especially in the entry-level category, as inventory levels beyond 30 days can hamper dealer profitability due to increased interest costs.
With over 15,000 dealerships and 30,000 outlets under its representation, FADA's comprehensive report based on data collected from a majority of regional transport offices across India highlights the significant strides and challenges faced by the Indian automobile retail industry in November 2023.