In November 2024, retail automobile sales increased by 11.21% showing some sort of positive sentiments in the sector. After the sector being sluggish for long, this growth is what investors were looking for. The auto retail sales grew across categories; however, two-wheelers were the main driving force as per the Federation of Automobile Dealers Associations (FADA).
Segment-wise Sales
Let’s understand how the sales grew in the preceding month according to the segments –
- Two-wheelers: Two-wheelers retail sales of this segment stood at 2615953 units in November up from 2258970 units in November 2023, a year back displaying an increase of 15.8%. The prime reason behind the growth in the sales figure is festival-led purchases.
- Passenger vehicles: This segment witnessed a decrease in its retail sales figure by 13.72% YoY. In this November, passenger vehicle sales on a retail basis stood at 321943 units, while it was 373140 units a year back. While dealers expected this month to be great for PV sales as well, led by marriage season kicking in, the actual sales were pretty lower than expected figures as commented by FADA.
- Commercial Vehicles: Retail sales in this segment were down from 87272 units a year back in November, to 81967 units this November.
- Three-wheelers: This segment witnessed a growth of 4.23% YoY this November when the units sold stood at 108337 against 103939 units in last year’s November.
While these were the retail sale figures for only the month of November, here is a snapshot of how the sector performed (segment-wise) in the past six months since April –
| Segment | Apr-Nov 2024 | Apr-Nov 2023 | Growth (%) |
| Two-wheelers | 13259744 | 11627404 | 14.04 |
| Three-wheelers | 826509 | 768057 | 7.61 |
| Commercial vehicles | 657634 | 659515 | -0.29 |
| Passenger vehicles | 2697934 | 2589501 | 4.19 |
| Tractors | 550810 | 569570 | -3.29 |
| Total | 17992631 | 16214047 | 10.97 |
Factors Driving the Auto Sales
As per FADA, the prime factors driving the auto retail sales, and the entire market include –
- The rural market has helped the overall sales to grow, especially the two-wheeler segment.
- The festive-led sales helped October numbers to grow however, the expected sales in November owing to the onset of the wedding season failed the sector by remaining subdued.
- Overall market sentiment remained weak.
- Limited variety in automobiles has been a primary concern along with just a few new launches.
- Inventory levels have come down by 10 days from the previous high, but it is still around 65-68 days which is concerning.
- Limited support from the financiers has been another concern for the sector in recent times.
- No major festivals in October, along with sluggish wedding-led sales affected the commercial vehicles segment the most taking it down by 6.08% YoY.
- Other factors such as sluggishness in the cement and coal industries led the sales to drop for the CV segment.
Retail Auto Sales Outlook
As per FADA, the near-term outlook remains mixed as the market sentiment remains sluggish and there is no major trigger in December. However, with the Kharif harvest around the corner in the upcoming month, the food inflation is expected to come down which can help the auto sector grow as well as people will have money in their pockets due to easing inflation.
The two-wheeler demand may jump a bit in December with the year-end discounts kicking in and the trigger for the PV sector can be huge discounts too but more options and variety with better and improved quality are expected to be more in demand and can offset the sluggishness in the segment.
Source: TheHindu
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