November was the best month for car sales in India's automotive sector history, according to data provided on Wednesday by the Federation of Automobile Dealers Associations (FADA).
With a total purchase of 28.54 lakh units, customers across all segments and categories broke the previous record established in March 2020, which had stood at 25.69 lakh units. The current optimistic mood in the market is further reinforced by this data.
After the US and China, India is now the third-largest market in the world, surpassing Japan in recent times. In 2023, the automotive sector has been rock solid, but November was particularly noteworthy, with two-wheelers and passenger vehicles (PVs) showing remarkable strength.
Sales of two-wheelers hit a new monthly high of 22.47 lakh units, more than double the previous high of 20.7 lakh units recorded in March 2020. Equally impressive, sales of passenger vehicles (PVs), also known as cars, hit a new high of 3.6 lakh units, surpassing the previous record of 3.57 lakh units set in March 2020.
Dhanteras and Diwali, two major Indian festivals, fell in November this year, which likely contributed to the unusually high sales volume. Another factor that contributed to higher sales was the start of the wedding season in various regions of the nation in November.
The annual growth rate was 18% and the month-over-month growth rate was 35% in November 2023, according to FADA President Manish Raj Singhania. There was a 21% year-over-year increase in two-wheelers, a 23% increase in three-wheelers, and a 17% increase in passenger vehicles. It should be mentioned that sales of commercial vehicles fell 2% and those of tractors fell 21%.
It is worth noting that FADA is cognizant of the fact that weather conditions might impact rabi crops, which in turn could impact future sales of vehicles. The FADA news release points out, "Severe rains and hailstorms in west and south India are expected to dampen rabi cultivation, which is already experiencing slow sowing and low reservoir levels, potentially impacting the final crop output."
"Vehicle sales could take a hit in the near future if this causes inflation, which would raise the prices of necessities."
The Federal Auto Dealers Association (FADA) has issued a direct challenge to the original equipment manufacturers (OEMs) of passenger vehicles (PVs) to come up with enticing plans to reduce dealership inventory and encourage last-minute holiday purchases.
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