Vehicle sales surge over 47% in October: FADA

According to data available with vehicle retailers body Federation of Automobile Dealers’ Association (FADA), 2,094,378 vehicles were retailed in October, which is an increase of 47.62% compared to 1,418,726 units sold in the same period last year. Sales were even higher by 8.32% compared with the pre-covid month of October 2019, when 1,933,484 vehicles were sold in the country.

FADA President Manish Raj Singhania said, the festive season this year brought cheer to the auto industry. “For the first time customers of every category came out in good numbers and took part in festive purchases thus making it the best in last 4 years. As anticipated earlier, PV segment saw the best year in a decade by outgrowing 2020 numbers by 2%. When compared to pre-covid festive of 2019, overall retails were up by 6%. All the categories were in green with 2W, 3W, CV, PV and Trac growing by 2%, 2%, 14%, 18% and 55% respectively”, said he.

The federation has compiled the numbers from the vehicle registration data available on the road transport and highways ministry’s Vahan dashboard. Though the numbers are incomplete as some regional transport offices are still not linked to the Vahan portal, these are seen as a good proxy for the trend in the automobile retail market as manufacturers only disclose their dispatches from factories.

Retail sales of three-wheelers and commercial vehicles increased by 65.87% (to 66,763 units) and 25.40% (to 74,443 units), respectively. Retail sales of commercial vehicles remained strong last month with on back of demand from the mining sector and government increasing spends on infrastructure projects.

Demand for two-wheelers grew by a robust 51% to 1,571,165 units in October, however, and for the first time by 6% over Oct’19. Singhania explained with both Navratri and Deepawali falling in a single month, October saw double foot fall at dealerships. “Dealers say that sentiments have also started improving at the rural level but the same needs to sustain for at least next 3-4 months. Apart from this, new launches and good customer schemes also played a pivotal role in helping revival in demand”, said he. Channel inventory now stands at 40-45 days.

In the passenger vehicle segment, demand remained robust with registrations going up by 41% over last October; and by 18% when compared to Oct’19, a pre-covid month. Singhania said, “ PV segment continues to see extremely high demand especially in SUV and compact SUV segments including higher variants in most of the product categories. With better vehicle availability coupled with new launches, the segment also witnessed the best festive period in a decade.” Average inventory of passenger vehicles ranges from 35-40 days.

Tractor sales last month went up by 17.42% to 53,362 units.

Overall, Singhania said with the festive season drawing to a close, November is likely to witness a ‘certain amount of softness in sales’. “While farmers will start receiving their crop realisations, the overall sentiment continues to show some headwinds especially in the 2W rural segment. For auto retails to show strength, the 2W segment will have to grow for at least 3-4 months over pre-covid months to come out of the woods”, said he.

FADA expects vehicle prices to go up over the next few months as most of the OEMs will now start migrating towards manufacturing OBD-2 norms vehicles. Also with year-end coming close, the industry body cautioned sales may become sluggish as many customers wait for vehicles manufactured in the new year.