Kolkata: Vehicle sales in the country picked up pace during Navratri. According to data from the Federation of Automobile Dealers Associations (FADA),
a total of approximately 10.32 lakh vehicles were sold during the nine days of Navratri. During the same period last year, 10.12 lakh vehicles were sold. This represents a 1.95% increase in vehicle sales on an annual basis. Significantly, after the implementation of GST 2.0 last year, a large number of customers visited showrooms to take advantage of price reductions. Therefore, this year’s increase in sales is being considered a positive sign for the auto sector.
Two-wheeler sales rose 5.78%
Two-wheeler sales during Navratri supported the overall figures. 7.60 lakh two-wheelers were sold during this period, which marked a rise of 5.78% compared to the same period last year. Two-wheelers accounted for nearly three-quarters of total vehicle sales.
Passenger cars sales declined
Passenger vehicle sales, i.e., cars and SUVs, declined. This segment declined 13.66% YoY, with a total of 1.72 lakh vehicles sold. Among the major vehicle categories, passenger vehicles were the only segment to experience a double-digit decline. Last year, following the GST reduction, car and SUV prices fell. This boosted purchases in this segment, and many customers had already made their purchases. Consequently, the base for comparison this year remained high.
Commercial vehicles, tractor sale increased
Commercial vehicle sales increased 14.21% during Navratri. A total of 34,120 commercial vehicles were sold during this period. Tractor sales increased by 8.87% to 20,912 units. Construction equipment sales also increased by 10.86%, reaching 2,185 units. However, three-wheeler sales declined 1.65% to 43,057 units.
Sales growth despite high base
FADA President Sai Giridhar has pointed out that while sales growth may appear modest, last year’s base was quite high. He said that approximately 30 to 45 days of demand last year had already been met.
He said that negative growth was expected this year, but instead sales increased. According to Giridhar, the decline in passenger vehicle sales should not be directly interpreted as a sign of weak demand, as this segment was most affected by the GST reduction. He also said that the difference in the festival calendar may impact sales comparisons during Dussehra. Last year, Navratri and Dussehra combined spanned 11 days, while this year they span 10 days. Despite this, the sentiment among buyers remains encouraging. Despite several increases in vehicle prices this year, demand has increased.
Inventory rising
Despite the increase in sales, the rising inventory of vehicles remains a concern for dealers. According to previously released data from FADA, dealers had approximately 45 days of passenger vehicle inventory at the end of September. This was the highest level in nearly a year.
Holding excess inventory increases dealers’ financing costs, as they have to pay interest on loans they take from automakers to purchase vehicles. Despite several price increases this year, automakers are offering significant discounts to attract customers. This is also putting pressure on dealer margins.
FADA earlier expressed concern that if inventory levels remained high during the festive season, dealers might face challenges selling older model year vehicles. They might have to offer higher discounts to clear these vehicles and even invest their own capital to clear unsold stock. Passenger vehicle inventories increased by approximately 33,000 units in September.
