Federation of Automobile Dealers Associations (FADA) released retail vehicle data for November 2024 presenting a mixed picture across various automotive segments. While categories such as two-wheelers (2W), three-wheelers (3W), and tractors, experienced significant year-over-year (YoY) growth, passenger vehicles (PV) and commercial vehicles (CV) faced notable declines reflecting the challenges and opportunities shaping India’s auto market.
Growth In Two-Wheelers and Tractors
Two-wheelers registered 15.8% YoY growth with sales reaching an all-time November high of 26,15,953 units. This spike was driven largely by spillover festive demand and rural stability. Tractors exhibited an even stronger performance with a 29.88% YoY increase, buoyed by agricultural demand and expectations of a strong Kharif harvest. This marked improvement underscores rural India's resilience in supporting vehicle sales.
Passenger Vehicles and Commercial Vehicles Decline
In contrast, passenger vehicles witnessed a 13.72% YoY decline with retail sales slipping to 3,21,943 units. This drop is attributed to subdued market sentiment, inventory challenges, and the absence of significant new launches. Commercial vehicles also contracted with a 6.08% YoY reduction in retail volumes. Dealers highlighted limited product variety and weak demand from key sectors such as construction and logistics as contributing factors.
Performance by Segments
- Two-Wheelers: The segment's 26.67% month-over-month (MoM) growth highlights a recovery trajectory, supported by year-end offers and improved rural demand. Leading OEMs like Hero MotoCorp retained dominance with a 35% market share, followed by Honda Motorcycle and Scooter India at 25.02%.
- Three-Wheelers: While overall YoY growth was modest at 4.23%, passenger three-wheelers showed resilience, growing by 6.3%. However, MoM sales declined by 11.81%, reflecting demand volatility in urban and semi-urban areas.
- Passenger Vehicles: Maruti Suzuki continued to dominate with a 39.92% market share, although its YoY sales fell from 1,53,103 to 1,28,521 units. Other key players, including Hyundai and Tata Motors, also experienced declines.
- Commercial Vehicles: Tata Motors led the CV market with a 33.76% share, followed by Mahindra & Mahindra at 28.12%. However, overall volumes dipped due to a slowdown in construction and industrial activity.
- Tractors: Mahindra & Mahindra remained the segment leader with a combined market share (including Swaraj) of 42.5%, driven by strong rural demand and favourable monsoon patterns.
Challenges
High inventory levels in the PV segment, ranging between 65-68 days, remain a pressing issue, with FADA urging OEMs to align production with market demand. The CV segment continues to grapple with sluggish infrastructure activity and weak industrial growth, dampening overall sentiment.
However, the broader outlook is cautiously optimistic, supported by anticipated easing of food inflation due to the Kharif harvest, stable rural demand, and potential year-end discounts. Approximately 39% of dealers expect growth in December, while 40.54% anticipate flat sales.
Regional and Rural Dynamics
Rural areas demonstrated stronger YoY growth compared to urban markets across several categories. For instance, rural 2W sales grew by 19.93% YoY, compared to 9.08% in urban areas. Similarly, tractor sales in rural regions increased by 28.79%, reflecting the sector’s critical role in supporting the broader market.
While the growth in two-wheelers and tractors signals resilience, the declines in PV and CV segments underscore the need for strategic inventory management and demand stimulation. As the industry looks toward December, stakeholders remain cautiously optimistic about leveraging year-end offers and rural demand to drive sales momentum.
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