In October and November 2024, India’s automotive retail sales reached an all-time high, growing 32% year-over-year to 28,32,944 units. The industry achieved this milestone as revealed by the Federation of Automobile Dealers Associations (FADA). The milestone has marked recovery of the economy post-pandemic but also reflected the influence of the festive season on consumers. It has been driven by the surge in demand for two-wheelers and passenger vehicles, especially SUVs, which have gained tremendous traction among Indian consumers in the recent past.
The Indian automotive industry witnessed a significant surge in total vehicle retail sales in October 2023, with a 32% year-over-year (YoY) growth, reaching 28,32,944 units compared to 21,48,566 units in October 2022. Notably, two-wheelers saw a 30% YoY increase from 17,43,261 to 22,63,001 units, while passenger vehicles rose by 28% from 2,66,008 to 3,42,626 units. Commercial vehicles experienced a substantial 43% YoY growth from 50,127 to 71,853 units, and three-wheelers increased by 36% from 40,170 to 55,464 units. Regionally, the North, South, East, and West zones recorded 33%, 30%, 37%, and 32% YoY growth, respectively. This remarkable growth can be attributed to festive season demand, new launches, economic recovery, and increasing adoption of electric vehicles, indicating a positive trend for the industry’s future prospects.
The growth in sales in October once again draws attention to other trends-the greater financing options and discounts by manufacturers, and changing consumer preference. However, at the same time, challenges that cropped up in this positive number have been addressed with regard to inventory management since the rise in stocks has crossed general parameters mainly because the earlier slowdowns had pushed more stocks, and dealership offers got stretched further. Both FADA and industry leaders are, therefore, looking for gauging the performance during November so that they may be able to get an all-rounded view of what festive season has done for them.
Such an extraordinary month reflects the aligning of economic trends, seasonal demand, and consumer preferences in shaping the Indian automotive market’s trajectory into 2025.
Growth Drivers
1. Two-Wheelers Sales: There is a notable upside in two-wheelers’ sales, as these are generally always in demand in rural and semi-urban markets, wherein the festive season along with few offers and discounts boosted sales. Overall, the growth is there in the category of two-wheeler because of pent-up demand and extended finance offers from the manufacturers side.
2. Passenger Cars and SUVs
One of the primary growth drivers in the case of passenger cars is SUVs. In fact, the Indian market’s move toward utility and versatility in cars has reflected well in this trend in consumer preference for SUVs. Maruti Suzuki, Hyundai, and Mahindra have garnered the trend through new as well as existing models of SUVs. In Mahindra’s case, the Thar and XUV700 recorded very good sales. The rise of the popularity of SUVs amongst consumers has ensured this very segment is the heart and soul of India’s automobile growth.
Inventory Issues
Sales were quite strong; however, the inventory management was a concern. According to FADA, average inventory days for PVs was at 75–80, against the desired benchmark of 30–45 days for dealers. This partly has been due to a slow start this year in sales, considering prolonged summer heat and heavy rains diminishing footfalls into showrooms. With this, the inventory levels increased with the advent of the festive season. Dealers therefore offered extended discounts for excess stock, which may alter the price strategies until the end.
Going Forward: Mild Optimism
With cautious optimism, FADA is looking ahead into the market. In sight of complete festive-season influence, the association reveals that it would be collating data of both October and November. Having hope for October, however, any market uncertainties relating to conditions of the economy, the interest rates or even hiccups in the chain of supply are still items to be continued monitoring for dealers and manufacturers at year-end.
Conclusion
In India, the automotive industry touched a milestone in October 2024, as its retail sales increased by 32% from the previous year, mainly due to festival season and consumer demand for two-wheelers and SUVs. However, it is pointed out that the increased inventory remains a challenge and affects future strategies.
These trends bode well for the seasons and Indian consumer preferences, which means that SUVs and two-wheelers would be growth drivers for the future period.
