Two-Wheeler Sales Jump 36% YoY and 71% MoM Amid Festive Demand: FADA

The Federation of Automobile Dealers Associations (FADA) released vehicle retail data for October 2024, marking substantial growth across India’s automotive sector. Overall vehicle retail sales surged by 32 per cent year-over-year (YoY) and 64 per cent month-over-month (MoM), attributed to a confluence of seasonal festivals and favourable market conditions in rural areas. 

Every major vehicle category saw positive YoY growth in October 2024. Two-wheelers (2W) led with a 36 per cent increase, followed by passenger vehicles (PV) at 32 per cent, commercial vehicles (CV) at 6 per cent, three-wheelers (3W) at 11 per cent, and tractors (Trac) at a modest 3 per cent. The rural market was pivotal in driving demand, particularly for two-wheelers and passenger vehicles. Increased government support, including a rise in the Minimum Support Price (MSP) for Rabi crops, enhanced rural purchasing power, bolstering overall sales. 

C S Vigneshwar, FADA President, said, “October 2024 witnessed the convergence of two major festivals, Navratri and Diwali, both occurring in the same month. These festivities traditionally account for 30–35% of total annual auto sales, so the industry focused on how October would unfold. With dealers entering this crucial period fully committed and carrying all-time high inventory levels, the month did not disappoint.”

The 2W segment showed remarkable growth of 71 per cent MoM and 36 per cent YoY. Major festivals like Navratri and Diwali, both in October, significantly boosted consumer demand, complemented by festive offers, new model launches, and increased vehicle stock. Rural areas, benefitting from favourable monsoons and high crop yield expectations, further supported growth. 

The PV segment reported 32 per cent YoY and 75 per cent MoM growth. Festive demand, combined with aggressive promotional offers and high consumer interest in SUVs, drove sales. However, dealer inventories remain elevated at 75-80 days, suggesting the need for continued discounts through the end of the year to balance supply and demand. 

The CV category achieved modest growth, rising by 6 per cent YoY. Demand was bolstered by agricultural and container transport needs, with additional support from the festive season. However, lingering challenges like slow construction activities, financial constraints, and rising vehicle prices tempered growth prospects for the segment.

FADA anticipates sustained momentum for November and December, driven by the upcoming wedding season, with approximately 4.8 million weddings expected. This period traditionally sees a spike in demand, particularly in the two-wheeler and passenger vehicle segments.

The two-wheeler segment is likely to benefit from strong rural demand due to good crop yields and favourable sentiments. For commercial vehicles, ongoing agricultural demand and bulk purchases may provide support, although dealers remain cautious due to sluggish construction activity and potential demand reduction post-festivals. For passenger vehicles, demand should stay strong through the wedding season, though some customers may delay purchases, anticipating better year-end discounts.