Vehicle Retail Sales Inch Up 2.84% In August; September Expected To Shine: FADA
The automobile dealers body also highlighted that heavy rains and floods in some regions disrupted walk-ins, while uneven supply of high-demand models and aggressive OEM targets added to the pressure.
Vehicle retail sales across India increased by 2.84% in the month of August as per data released by Federation of Automobile Dealers Association (FADA). Major growth in retail sales was registered in the tractors category, which shot up to 30.14% YoY, followed by 2.18% growth in the two wheeler, 0.93% growth in passenger vehicles category, which registered a retail growth of 2.18% YoY and 0.93% YoY growth in passenger vehicles.
In a statement FADA said, "The month began on a positive note with healthy enquiries and festive bookings, but momentum slowed in the latter half as the announcement of GST 2.0 reforms led many customers to postpone purchases, anticipating a price reduction."
The automobile dealers body also highlighted that heavy rains and floods in some regions disrupted walk-ins, while uneven supply of high-demand models and aggressive OEM targets added to the pressure.
Speaking to NDTV Profit, CS Vigneshwar, President of FADA said "We expect strong rebound in late September led by Navratri, GST clarity and festive demand." He added that September will mark the start of a strong growth cycle for Indian Auto Retail.
On the other hand, commercial vehicle retail sales were up 8.55% YoY and only sales in 3-wheelers and construction equipment dipped 2.26% YoY and 26.45% respectively.
As per FADA, at the close of August, average inventory levels stood elevated at around 56 days. "Despite this temporary pause, demand fundamentals remain intact, supported by festive sentiment and strong customer interest in both ICE and EV models. Dealers expect September to deliver a sharper rebound, as GST clarity and auspicious festive days converge to unlock deferred demand," said FADA in a statement.
Near-Term Outlook
FADA is optimistic that September will mark the beginning of a strong growth cycle for auto retail.FADA expects September to be a two-phase month for the industry. It expects a muted first half due to Shraddh and GST wait-and-watch, followed by a sharp surge as policy clarity, festive sentiment, and OEM schemes that mirror upcoming GST reductions converge.
"These schemes allow customers to book vehicles now while enjoying GST-aligned benefits, ensuring timely deliveries on their preferred auspicious dates such as Navratri and Durga Puja. Dealers across categories expect this strategy to unlock deferred demand and smoothen festive season supply," said FADA.
