India's automobile sales at dealerships surged to the second highest level ever as the marriage season boosted demand in November.
Sales rose 25.7% over a year earlier to 23.8 lakh units in the month, according to the Federation of Automobile Dealers Associations. They were 1.5% higher than the corresponding pre-pandemic month of 2019.
“November 2022 has clocked the highest retails in the history of the Indian automobile industry, with March 2020 as an exception when retails were higher due to the BS-4 to BS-6 transition,” Manish Raj Singhania, president at FADA, said in a statement. “The baton was passed by the positive run of festive sales to the Great Indian Wedding Season—from Nov.14 to Dec.14—where around 32 lakh weddings will be solemnised across the country.”
The dealer body said the better availability of cars, new launches, and increase in rural demand aided sales of passenger vehicles, with compact SUVs and SUVs dominating the sales.
November Auto Retail Sales (YoY)
Passenger vehicle sales rose 21.3% to 3.01 lakh units.
Two-wheeler sales rose 23.6% to 18.48 lakh.
Commercial vehicle sales jumped 32.8% to 79,369 units.
Sales of three-wheelers rose 80.34% to 74,473 units.
Tractor sales rise 56.8% to 77,993 units.
Two-wheeler retail sales rose over a year earlier but fell 0.9% compared to November 2019. FADA, however, sees it as a sign of the segment slowly turning the tide, with the wedding season boosting retail demand.
The commercial vehicle sales continued to benefit from the government's focus on infrastructure. New mining projects drove replacement demand, while higher inter-state passenger movement aided bus sales, FADA said.
Outlook
“We expect spending on auto sales to go up once the harvest comes into the market and farmers start getting money in their hands,” the dealers' body said in the press release.
This, along with improving consumer sentiment and year-end discounts, will ensure strong auto sales in the coming months, it said.
The 25-basis-point increase in repo rate by the Reserve Bank of India brings it to 6.25%, which may dent consumer confidence in two-wheelers and entry-level passenger vehicles, according to FADA.
It also sees the slow supply of semiconductors due to China's lockdown as a risk to the industry. “Due to the above reasons, FADA remains cautiously optimistic in the near term,” it said.
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