The 42 days of the Diwali festive season have brought back the momentum in vehicle sales with all categories posting more than 25% growth YoY. October saw an overall growth of 48%, said Manish Raj Singhania, President, FADA (Federation of Automobile Dealers Associations).
“With most of the month under the festive period, sentiments were extremely positive across all categories of dealership outlets. Even when compared to the pre-COVID month of 2019, overall retails for the first time closed in green by growing 8%,” he added.
Except for three-wheelers, which saw a marginal dip of 0.6%, all other categories including two-wheelers, passenger vehicles, tractors and commercial vehicles grew by 6%, 18%, 47%, and 13% respectively.
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PV Sales Up 34.33%
Passenger vehicle sales, which were the worst hit in the aftermath of the pandemic and the lockdowns that followed, posted a growth of 34.33% with 456,413 units sold during the festive period.
This was in contrast to 339,780 vehicles sold during the festive season of 2021, almost at par with 446,984 units in the 2020 period and higher than 386,421 in 2019.
FADA noted in its press release that SUVs (including compact SUVs) continued to see good demand. “With better vehicle availability coupled with new launches, the segment also witnessed the best festive Period in a decade by surpassing 2020 sales by 2%,” said Singhania.
3W Sales Post Highest Jump
While electric three-wheelers have already emerged the poster boy of EV adoption, the 3W segment (ICE+EV) posted 68.20% YoY growth by retailing 93,239 units during the 2022 Diwali season. However, sales were marginally below the red line in 2019 by de-growing 0.6%. All in all, 55,435 3W units, 36,193 3W units, and 91,482 3W units were sold during the festive seasons of 2021, 2020, and 2019, respectively.
“The sub-category figures clearly show that a shift is happening towards EV adoption while ICE vehicles are no more favourites. In a few pockets due to permit issues, new vehicle sales have taken a hit during the month,” said Singhania.
The cherry on the cake came in the form of 2W sales, which were the best this Diwali compared to the last four festive seasons. Dealers say sentiments have also started improving at the rural level but need to be sustained for at least the next 3-4 months. Apart from this, new launches and good customer schemes also played a pivotal role in helping revive demand.
“The 2W segment showed a huge growth of 51% YoY and for the first time, 6% compared to October 2019, a pre-COVID year. With both Navratri and Diwali majorly falling in a single month, October saw double footfall at dealerships,” said Singhania .
Against 1,705,456 2W units retailed during the festive season of 2021, this year saw a tally of 2,155,311 units.
CVs & Tractor Sales Grow
The CV segment continues to do well with 25% growth YoY and 13% growth compared to 2019. As against 81,676 CV units sold in last year's festive season, this year saw the number rise to 105,566 units. CV sales this festive season were best during the last four (festive) years.
As Singhania said, “With mining and infrastructure projects increasing in various regions, demand has been keeping well and is also coming back on track.”
Tractor sales also posted the best festive season sales figures of the last four years in this same period. Against 59,792 units sold during the 2021 festive season, this year's figure was 77,602 tractors, a 29.79% YoY growth.
FADA remains cautious as the auto industry approaches the year-end period with most OEMs migrating towards manufacturing OBD-2 norms vehicles. The association is of the view that for sales to show strength, the 2W segment will have to grow for at least 3-4 months over pre-COVID months to come out of the woods.
“With festivities ending, the immediate next month generally witnesses a certain amount of softness in sales. While farmers will start receiving their crop realisations, the overall sentiment continues to show some headwinds, especially in the 2W rural segment,” signed off Singhania.