FADA releases Sep’23 Vehicle Retail Data

Mumbai, October 9, 2023: The Federation of Automobile Dealers Associations (FADA) today released Vehicle Retail Data for Sep’23.

•    Strong YoY Growth in September: The automotive retail in September showcased a robust double-digit YoY growth of 20%. Except for Tractors, which witnessed a -10% de-growth, all other categories experienced growth, with 2W seeing a 22% increase, 3W at 49%, PV at 19%, and CV up by 5%.
•    Positive MoM Dynamics: On a MoM basis, the industry enjoyed a 3.5% growth in total auto retail sales. However, the tractor segment continued to fall, with a substantial 26% contraction.
•    Healthy Recovery Indicators: Compared to the pre-pandemic period, the overall retail landscape exhibited a massive 14% growth, signalling healthy recovery. The 2W category, for the first time, showed a growth of 2%, potentially marking the beginning of a turnaround in rural markets.
•    Record-Breaking 3W Segment: The 3W segment maintained momentum, setting consecutive all-time high retail records. Sales for September peaked at 1,02,426 units, marking a staggering 49% YoY and 5% month-over-month growth and breaching the 1 Lakh mark.
•    Unprecedented Inventory Levels: Inventory levels for PV have reached the 60-65 days threshold, establishing an all-time high as Dealers anticipate a bumper 42-days festive period.
•    Monsoon Patterns Favourable: September rainfall alleviated India’s drought fears, with the country receiving 94% of expected rains. The IMD forecasts a ‘normal’ north-east monsoon for the October to December period.
•    Festive Season Outlook: October begins with the inauspicious Shraadh period until the 14th, post which the 9 days of Navratri will commence from October 15th. With the 42 days festive period (Navratri + Deepawali) approaching, FADA shifts its stance from Cautiously Optimistic to Optimistic, anticipating a vibrant festive season for Auto Retail in India with monsoon worries dispelled.

 
Commenting on September 2023 Auto Retails, FADA President, Manish Raj Singhania said, "September's Auto Retail celebrated a 20% YoY leap, continuing the momentum from the previous month while marking a 3.5% MoM increase, seamlessly transitioning into the festive period’s sweet spot set to unfold over the next 42 days.
 

The YoY analysis reveals broad-based growth across segments as 2W posted a 22% increase, 3W soared at 49%, PV grew by 19% and CV at 5%. However, Tractors diverged with a -10% decline. In comparison to pre-COVID benchmarks, the sector enjoyed a robust 14% uplift, with the 2W category registering growth (2%) for the first time.
 

Remarkably, 3W sales notched another all-time high in September, recording 1,02,426 units. This represents a 49% YoY and a 3% MoM growth, surpassing the previous record of 99,907 units set in August’23.
 

The 2W segment witnessed positive shifts as the festive season approaches. With the introduction of new models and attractive promotional offers, demand increased, especially in rural areas, fostering improved market sentiments. 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 favourable reception to newly launched entry-level products have set an optimistic tone for the upcoming festive season.
 

Sept’23 showcased a resilient CV segment, observing a noticeable demand in coal, cement and general market load sectors, with the passenger carrier segment also experiencing a favourable uptick. This positive trend can be attributed 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. Furthermore, there was a discernible improvement in market sentiment post-Covid, supporting a healthy traction in HCVs, Buses and LCVs and signalling a revitalized tourism market.
 

The PV category experienced a stimulating resurgence as the market enjoyed improved vehicle availability and an influx of new and refreshed models from various OEMs. This uplift was supported by enhanced supplies and an increasing variety in the product portfolio, answering to a diversifying consumer demand. 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."
 

Near Term Outlook
As the festive season unfolds, a wave of anticipation and enthusiasm is expected to sweep across the automotive sector. In the 2W segment, although the initial half of the month might be quiet due to the Shraddh period, the aura of upcoming festivals like Durga Puja and Navratri is predicted to brighten the sales atmosphere, with enhanced customer sentiment and competitive pricing playing pivotal roles. The introduction of new models will further add to the optimism.
 
Similarly for CV, with the cessation of monsoons, a resurgence in infrastructure projects and essential goods transportation is anticipated in creating a robust demand. The market is likely to be buoyed by the availability of a broader range of vehicles and enticing finance options thus facilitating bulk purchases. In the PV segment, the market foresees a boost with the launch of new products, improved availability of popular models and continued success of recently unveiled vehicles.
 
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. The favourable monsoon patterns, with India receiving 94% of expected rainfall, set a positive backdrop for the festive season. As we move past the Shraadh period on October 14th, the market is poised for the onset of Navratri, heralding a 42-day festive window. With these promising indicators, FADA adopts an Optimistic stance, anticipating a thriving festive season for the Indian Auto Retail sector.