India’s automobile industry hit a milestone last month by finally crossing pre-pandemic sales figures. Total retail sales figures for November at more than 28 lakh vehicles, released by the Federation of Automobile Dealers Association (FADA) on Wednesday morning, surpassed the 25 lakh plus vehicles sold in March 2020, just before the nation went into lockdown and the pandemic hit.
November figures, boosted by festive season sales in the run up to Diwali on November 13 , also saw two-wheelers and passenger cars setting new all-time highs of 22 lakh plus for bikes and scooters (20 lakh plus in March 2020) and 3.6 lakh cars (surpassing previous record of 3.57 lakh during last year’s Diwali).
Last month witnessed a year-on-year growth of 18 per cent and a month-on-month growth of 35 per cent. While cars, bikes, scooters and autos showed robust growth, tractors and commercial vehicle sales showed a year-on-year drop of 21 per cent and 2 per cent respectively.
“November 2023 has become a historic month for the Indian automobile industry as during the month (sales) overtook the previous highs of March 2020 during the BS-4 to BS-6 transition. Apart from this, 2W and PV also created new records,” said FADA president Manish Raj Singhania.
For cars, bikes and scooters, the retail sales have been exhilarating, which Singhania attributed to being “buoyed by the festive excitement of Deepawali and enhanced by strong rural sentiments, thanks to thriving agricultural income.”
“New product launches and better model supply further fuelled the market's growth, while electric vehicle sales demonstrated an encouraging upward trajectory,” he added.
However, the drop in commercial vehicle sales, which has been more or less consistent for the past several years and actually even predates the pandemic to the economic slowdown witnessed since late 2018, remained a cause for worry to the industry in particular, and the overall economy at large.
“Seasonal slumps, exacerbated by unseasonal rains damaging crops and impacting transport demand, coupled with liquidity issues and delayed deliveries, further strained the industry,” said a note issued by FADA.
While car sales boomed in the days leading up to Diwali, FADA said it was worried by the noticeable slowdown following Diwali, coupled with a critical challenge of slow-moving inventory due to a mismatch in demand and supply which is still not resolved.
“This issue casts a shadow over the otherwise positive trends, highlighting the need for strategic adjustments in inventory management,” FADA warned. However, it said in its near term outlook that increased liquidity in the agricultural region as well as the ongoing wedding season could help boost sales in the coming weeks.