The Federation of Automobile Dealers Associations (FADA) has reported an 11.76% growth in vehicle retail sales during the 42-day festive period from 3 October to 13 November 2024. A total of 42.88 lakh vehicles were registered, compared to 38.37 lakh units in the same period last year. This increase highlights the sector's resilience despite challenges posed by unseasonal rains and a cyclone in South India.
Two-wheelers drove the surge achieving a 13.79% growth with 33.11 lakh units sold. Strong rural demand played a pivotal role in this category's success. The passenger vehicle segment rebounded with a 7.10% increase, registering 6.03 lakh units, buoyed by pent-up demand and generous market discounts. However, the sector faced setbacks in meeting its potential 45 lakh target due to Cyclone Dana and heavy rains in regions like Bengaluru, Tamil Nadu, and Odisha.
The three-wheeler segment grew by 6.81% reflecting increased adoption in urban and peri-urban areas. Commercial vehicle sales showed modest growth of 1.02%, as the industry awaits a boost from expected infrastructure spending by the government. Meanwhile, tractor sales fell by 1.64%, attributed to delay harvesting cycles and uneven rainfall patterns.
C S Vigneshwar, President, FADA, noted that the festive season has been a landmark period for the automobile retail sector, highlighting both achievements and areas for improvement. He cautioned that inventory levels, particularly for passenger vehicles, remain high and urged original equipment manufacturers (OEMs) to focus on clearing 2024 stock before the year ends. This would enable dealers to enter 2025 with the recommended 21 days of inventory.
Looking ahead, the automotive industry is poised to benefit from increased government spending on infrastructure and a rise in the Minimum Support Price (MSP) for crops, which is expected to boost rural income and tractor demand. However, FADA advises caution as market conditions remain dynamic, with weather and consumer sentiment playing key roles in shaping sales trends.
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