India’s retail vehicle sales showed strong growth in November 2024, with an 11.21% increase in sales compared to the same month last year. According to the Federation of Automobile Dealers Associations (FADA), a total of 32,08,719 vehicles were sold in November, up from 28,85,317 units in November 2023. This surge was primarily driven by the demand for two-wheelers, which saw a substantial rise despite weaker performance in other segments like passenger vehicles (PV) and commercial vehicles (CV).

Two-Wheeler Sales Surge:

The standout performer in the retail sales sector was two-wheelers, which registered a 15.8% increase, selling 26,15,953 units in November compared to 22,58,970 units during the same period last year. The growth in two-wheeler sales was largely attributed to festive season demand, with the spillover of festive buying into November playing a key role. Additionally, rural demand remained strong, further bolstering the numbers.

Passenger Vehicle Sales Decline:

While two-wheelers performed well, passenger vehicle sales were significantly lower, falling 13.72% to 3,21,943 units in November from 3,73,140 units in the previous year. FADA attributed the decline to weak market sentiment, limited product variety, and fewer new launches. This was coupled with subdued marriage-related sales and the late occurrence of Deepawali, which traditionally boosts demand for passenger vehicles. As a result, inventory levels for passenger vehicles remained high at 65-68 days, which is unusual for this time of the year.

Commercial Vehicle Sales Drop:

The commercial vehicle (CV) segment also saw a decline, with sales dropping by 6.08% to 81,967 units from 87,177 units in November 2023. This was indicative of softer demand in the commercial transport sector, possibly impacted by broader economic conditions and market uncertainties.

Three-Wheeler Sales Growth:

In contrast, three-wheeler sales grew by 4.23%, with 1,08,337 units sold compared to 1,04,103 units last year. The growth in the three-wheeler segment reflects continued demand, likely driven by transportation needs in urban and rural areas.

Outlook for December:

Looking ahead to December 2024, the FADA remains cautiously optimistic. While the market outlook appears stable, the association noted that challenges such as weak consumer sentiment and delayed purchases for new models may persist. Year-end discounts and improved product availability are expected to provide some relief, particularly in the passenger vehicle segment, where inventory levels remain high.

Furthermore, FADA is hopeful that the macroeconomic environment, including a potentially bumper Kharif harvest, could bolster consumer confidence and provide a positive boost to retail vehicle sales in the coming months. As the year progresses, OEMs (original equipment manufacturers) may also take steps to rationalize stock levels to better align with market demand as we approach the new year.

In conclusion, November 2024 retail vehicle sales showed strong performance, particularly in the two-wheeler segment, but challenges persist in other vehicle categories. The Indian auto market is expected to face some challenges heading into December, with consumer sentiment and inventory levels being key factors to watch.

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