Retail car sales jump 32% in Oct, inventory levels remain high

Update: 2024-11-06 15:28 GMT

Pune: Retail car sales in India jumped 32.4 per cent in October, boosted by festive demand, especially for sports utility vehicles (SUV), as well as new model launches and heavy discount offers, but inventory levels remained high, the Federation of Automobile Dealers Association or FADA said on Wednesday.

It said car dealers’ sales to customers rose to 4,83,159 units in the festive month of October, up from 3,64,991 units they sold last year.

“Two major festivals, Navratri and Diwali, which account for 30–35 per cent of total annual auto sales, drove good sales across categories,” said FADA President C S Vigneshwar.

He said all categories showed positive growth, with 2-wheeler up 36 per cent, 3-wheeler up 11 per cent, PV up 32 per cent, tractors up 3 per cent and CV up 6 per cent year-on-year.

This year, the mega festival season, an auspicious time during which Indians typically make big-ticket purchases like buying vehicles, houses and gold, started in early October, compared with mid-October last year, lifting sales in the month.

This aided retail sales clock double-digit growth, while wholesales, or carmakers' sales to dealers were flat or inched lower last month, with SUVs sales the lone bright spot.

In a relief to dealers, the strong retail sales ensured that a car stayed in a showroom five fewer days, on average, in October before being sold, reducing the inventory days to 75–80, compared to the recommended level of about a month, FADA said.

It said the long period of inventory has forced many dealers to continue with enticing discounts to clear the stocks until the end of this year.

FADA also said while the unsold vehicles have mostly comprised small cars, the proportion of SUVs has been inching up, creating anxiety among dealers.

Both automakers and dealers have said that the extreme heat and then heavy rains have curtailed showroom visits from April to September, with many customers having delayed purchases until the festive period in the hope of bagging higher discounts.

FADA will report retail sales for a 42-day period spanning October-November on Nov. 14, taking a longer timeframe to account for the different festival dates this year and last.

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