New Delhi: Vehicle registrations in India – a proxy for retail sales – increased by 20% from a year earlier in September, signaling strong demand in the domestic market.
The September performance has brightened prospects for accelerated sales this month, which will coincide with the key festivals of Navratri and Durga Puja, followed by Diwali in November.
Data collated by the Federation of Automobile Dealers Association (FADA) showed that total retail sales of vehicles also grew by 14% last month, compared to September 2019 before the pandemic. Two-wheeler sales, for the first time, rose 2% over September 2019, potentially indicating a turnaround in rural markets, according to FADA.
Passenger vehicle registrations increased by 19% to 332,248 units last month, while two-wheelers and commercial vehicles recorded growth of 21.68% to 1.31 million units and 4.87% to 80,804 units, respectively.
Three-wheeler sales surged 48.58% to 102,426 units in September, but tractors reported a 9.66% drop to 54,492 units.
FADA president Manish Raj Singhania stated that there has been broad-based growth across segments, except for tractors. The introduction of new models and attractive promotional offers has helped increase demand for two-wheelers, especially in rural areas. Singhania said, “This uptick in demand was accompanied by heightened customer walk-ins and an overall positive market response. Additionally, better stock availability compared to the previous year and a favorable reception to newly launched entry-level products have set an optimistic tone for the upcoming festive season.”
The current inventory of two-wheelers across sales channels is about 33-35 days, according to FADA.
Sales of commercial vehicles also saw an increase last month, driven by a noticeable improvement in demand for coal, cement, and general market loading sectors. Singhania attributed this positive trend to the “adequate deployment of funds from the Central Government towards infrastructure development, which fostered an environment for bulk deals, especially in tippers and government sectors.” Additionally, the revitalized tourism market after the pandemic has led to an increase in demand for buses.
In the meantime, improved vehicle availability and the launch of new and refreshed models have accelerated passenger vehicle sales. Singhania said, “The market showed consistent demand for luxury cars and SUVs, signifying a robust consumer appetite for premium segments. The segment also witnessed the benefit of good pending bookings and the launch of promising products, laying the groundwork for potential growth in the upcoming festive season.” The current inventory of passenger vehicles is between 60-65 days.
Strong consumer sentiment and the launch of new models during the upcoming festivals of Durga Puja and Navratri are expected to sustain the sales momentum in the two-wheeler market after Shradh when it is considered inauspicious to make new purchases.
In the commercial vehicle segment, Singhania said, “the cessation of monsoons, a resurgence in infrastructure projects, and essential goods transportation” is expected to create robust demand. The market is likely to be buoyed by the availability of a broader range of vehicles and attractive finance options, thus facilitating bulk purchases.
New launches, improved availability of popular models, and the continued success of recently unveiled vehicles are expected to boost demand in the passenger vehicle segment going forward. “With inventory for PV reaching an unprecedented 60-65 days threshold, it’s crucial for OEMs to proceed with caution, avoiding excessive inventory pushes, thereby ensuring a market that’s both vibrant and stable during the festive spree,” said Singhania.
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