Retail Car Sales Come Off The Cliff In November In Aftermath Of Festive Demand

Retail car sales in India came off a cliff in November 2024 as a tepid wedding season failed to support demand in the aftermath of the festive season.

The number of car registrations on the government's VAHAN website fell 13.72% from the year-ago period and 33.37% sequentially to 3,21,943 units last month, according to data released by the Federation of Automobile Dealers Associations on Monday. Retail sales of two-wheelers rose by 15.80% year-on-year, and 26.67% sequentially to 26,15,953 units. 

• Two-wheeler sales up 15.80% YoY at 26,15,953 units.

• Three-wheeler sales up 4.23% YoY at 1,08,337 units.

• Four-wheeler sales down 13.72% YoY at 3,21,943 units.

• Truck, bus sales down 6.08% YoY at 81,967 units.

Overall in November, 32,08,719 vehicles were registered as against 28,85,317 units in the year-ago period—a growth of 11.21% year-on-year. Car inventory levels eased by 10 days during the month to 65-68 days, according to FADA.

“The late timing of Diwali in October led to festive registrations spilling over into November, slightly boosting numbers but not sufficiently offsetting weaker marriage season demand,” FADA said in the statement. “The rural demand offered limited support, particularly in the two-wheeler segment, but failed to provide substantial lift for PV and CV sales.”

To be sure, a year-on-year comparison, or even sequential, of VAHAN data isn't accurate since the festive season last year was split between October-November. This year, it was concentrated in October with Dussehra, Dhanteras and Diwali in the same month. This festive period is crucial, for it brings in about a third of the industry's annual sales.

Still, that inventory levels reduced by just 10 days in the aftermath of the festive season is emblematic of the “atypical year” Indian Auto has had in 2024 so far.

While November was initially expected to build on prior momentum, particularly due to the wedding season, dealer feedback suggests that this segment underperformed overall expectations, FADA President CS Vigneshwar said in the media statement. “Although rural markets offered some support, primarily in the two-wheeler category, wedding-related sales remained subdued. The late occurrence of Diwali aided volumes.”

But there's no denying the notable headwinds afflicting the car industry, especially the inventory overhang that's threatening to spill over into next year. In the current scenario, carmakers will enter 2025 with two months of unsold stock. 

“Inventory levels have reduced by 10 days, but continue to remain high at 65-68 days. FADA continues to urge OEMs (original equipment manufacturers) to further rationalise inventory so that the industry can enter the new year on a healthier footing, reducing the need for additional discounts.”