With monsoon worries gone, auto sector bets on stellar festive revival

• Improved customer sentiment and competitive pricing are expected to play crucial roles in driving vehicle sales.
  
• The two-wheeler segment has seen a demand boost, especially in rural areas, thanks to attractive promotions.
  
• The passenger vehicle (PV) category has enjoyed a resurgence with improved vehicle availability and the introduction of new models.
  

As the festive season is upon us, there is a sense of eager anticipation and excitement that is sweeping through the automotive industry. In the two-wheeler (2W) segment, while the initial part of the month might be relatively quiet due to the observance of the Shraddh period, upcoming festivals like Durga Puja and Navratri are poised to inject a renewed energy into the sales environment, as per Vehicle Retail Data for Sep 2023 released by the Federation of Automobile Dealers Associations (FADA).

The uptick in demand is supported by improved customer sentiment and competitive pricing strategies, both of which are expected to play a crucial role in driving sales. Additionally, the introduction of new models into the market is set to further enhance the overall optimism.

In the passenger vehicle (PV) sector, the market is also poised to witness a sales boost during the festive season. This is fueled by the launch of new products, improved availability of popular models, and the continued success of recently introduced vehicles.

Similarly, in the commercial vehicle (CV) sector, the conclusion of the monsoon season brings with it the prospect of a resurgence in infrastructure projects and the transportation of essential goods. This anticipated increase in demand is expected to strengthen the market. The availability of a wider range of vehicles and attractive financing options is likely to facilitate bulk purchases, adding to the positive outlook in this segment.

Growth recorded across segments

Analysing the data when compared to the same period a year before, one sees broad-based growth across segments – In September, 2W sales increased by 22%, 3W surged by 49%, PV grew by 19%, and CV by 5%. Tractors sales, however, declined by -10%. Compared to pre-COVID benchmarks, the sector achieved a robust 14% increase, with the 2W category recording positive growth (2%) for the first time.

Says Manish Raj Singhania, president, FADA, "September's Auto Retail celebrated a 20% year-on- year (Y-o-Y) leap, continuing the momentum from the previous month while marking a 3.5% month-on-month (M-o-M) increase, seamlessly transitioning into the festive period’s sweet spot set to unfold over the next 42 days.”

Two wheeler sales hit record high

Three-wheeler sales hit a new high in September, reaching 102,426 units, showing a 49% Y-o-Y and 3% M-o-M increase, surpassing the previous record set in August 2023 at 99,907 units.

The two-wheeler (2W) sector saw a boost in demand as the festive season approached, thanks to new models and attractive promotions, especially in rural areas. This led to increased customer traffic and positive market sentiment, supported by better stock availability and the successful launch of entry-level products.

The passenger vehicle (PV) category enjoyed a resurgence with improved vehicle availability and the introduction of new models. There was consistent demand for luxury cars and SUVs, supported by pending bookings and promising product launches, setting the stage for potential growth in the upcoming festive season.

In September 2023, the commercial vehicle (CV) segment remained strong, driven by demand in coal, cement, and general market load sectors. The passenger carrier segment also experienced growth, attributed to government infrastructure investments and improved market sentiment post-COVID-19.