Vehicle Retail in India Set to Hit Record High This Festive Season

India’s big, grand festival season spread over September and October this year is set to overtake last year’s, in terms of more consumers purchasing and registering their favourite set of wheels. Last year, over 60 lakh vehicles were registered across India during the months of October and November. That figure was the highest-ever.

Though the major festival season started and ended in October last year, a large number of vehicle purchases and registrations spilled over to November as Diwali fell on 31st October.

Festive Cheer for OEMs

The current trend of retail sales indicates that automobile manufacturers have more reason to cheer this festive season. “The growth rate in the current festive season stands at 20 per cent, and is expected to be even better,” Saharsh Damani, CEO, Federation of Automobile Dealers Associations (FADA) tells Acko Drive.

He adds that the retail growth performance can be seen as robust considering that dealers cumulatively saw a 12 per cent growth in sales during the 42-day festive period last year. With Diwali coming up on Monday next, is set to accelerate the festive season growth rate this year. It is to be noted that the Navratri period retail sales this year grew 34 per cent YoY, a record high.

Key Contributors

The new GST regime, which kicked in from 22nd September, is seen as playing a key role in fuelling the growth as automobiles across the range have become more affordable in varying degrees.  

Improved liquidity in the rural economy due to above-normal monsoons, and a healthy Kharif season are helping the industry majorly. A key reflection is in the two-wheeler despatch performance last month. Overall two-wheeler dispatch to dealers grew 6.7 per cent last month, with the scooter segment witnessing a higher figure of 9.1 per cent. Passenger Vehicles saw a 0.9 per cent dip during the same period.

The current trends could well lead to a best-ever October in terms of automobile sales. And this festive season performance will significantly help the overall industry, which saw its domestic sales remain flat during the first half of the financial year, report growth on an annual basis.