Wedding season pushed vehicle retail sales up by 26% in November: FADA

All categories were in the green with two-wheelers, three-wheelers, passenger vehicles, tractors & commercial vehicles growing by 24%, 80%, 21%, 57% and 33%, respectively

India's vehicle retail sales jumped 26 per cent in November compared to the corresponding period in 2021, according to data released by the Federation of Automobile Dealers Associations (FADA). The rise in sales came on the back of the Great Indian Wedding Season (from November 14 to December 14) that has so far seen around 3.2 million weddings.

"November 2022 has clocked highest retail sales in the history of the Indian automobile industry with March 2020 as an exception when retail sales were higher due to BS-4 to BS-6 transition,” said Manish Raj Singhania, president, FADA. According to the association, the baton was passed by the positive run of festive sales into the wedding season.

All categories were in the green with two-wheelers, three-wheelers, passenger vehicles, tractors and commercial vehicles growing by 24 per cent, 80 per cent, 21 per cent, 57 per cent and 33 per cent, respectively.

Even when compared to the pre-Covid months of 2019, overall retail sales for the second consecutive month closed in the green by growing 1.5 per cent. Except two-wheelers, which saw a marginal dip of 0.9 per cent, all the other categories like three-wheelers, passenger vehicles, tractors and commercial vehicles grew by 4 per cent, 5 per cent, 61 per cent and 6 per cent respectively, compared to the pre-Covid times.

The two-wheeler segment showed a huge growth of 24 per cent year-on-year (YoY), but fell marginally by 0.9 per cent, when compared to November 2019. "This segment is slowly turning the tide from negative to positive as the same can be witnessed from retail sales due to the ongoing wedding season," Singhania said.

The three-wheeler segment showed a massive growth of 80 per cent YoY and 4 per cent when compared to 2019.

Singhania added that the category which witnessed low demand during Covid has now emerged as the highest growing category due to positive sentiments and the fear of lockdowns out of mind.

The passenger vehicle segment showed a growth of 21 per cent YoY and 5 per cent when compared to 2019. Better availability of model mixes, new launches and an increase in rural demand continues to keep the segment healthy.

The commercial vehicle segment witnessed a growth of 33 per cent YoY and 6 per cent compared to 2019. With the government's continued focus on the infrastructure space and new mining projects, replacement demand continued to grow along with healthy inter-state passenger movement enabling bus sales.

The association expects that while the ongoing festive season is continuing to help in bringing customers to the showrooms, the harvest season is also going to be positive for the industry as farmers start getting more money in their hands.

“The industry has already breached the pre-Covid level, if you compare it with the 2019 level, it has gone up by 1.5 per cent. . Overall health of the auto industry is back to normal. Normally, Q4 is the best of all the four quarters. In December, a lot of manufacturers are also coming up with good schemes for their customers, in addition, a price increase is also expected from April 1 with new BS VI norms that may push the demand further in Q4. Normally Q4 is the best month.,” Singhania added.

“So we expect a slight cool off in the coming month on a sequential basis. However on a yoy basis, on a low base we expect growth to continue. Retail sales are generally followed by wholesale sales which can be seen in coming months," said Ashwin Patil, Senior Research analyst at LKP Securities.