October Rescues Auto Industry Sales, But Stock Still High

The festive season boosted India’s auto sales by 32 per cent in October, driven by heavy discounts and seasonal demand. However, high inventory levels remain, prompting automakers to extend offers through year-end

The festive season in India is considered to be auspicious to buy new things, usually beginning with Onam in August and ending with Chhath Puja in November. For automotive sector, this period plays a critical role as it contributes to a major portion of the annual sales of an Original Equipment Manufacturer (OEM). With festive offers, exclusive limited-edition launches, attractive schemes and heavy discounts, the automobile makers try to attract buyers to make big-ticket purchases, including two-wheelers and passenger vehicles (PVs).

This year, the Indian automotive sector witnessed a slowdown initially, rising the unsold inventory to an all-time high of 75-80 days at the dealerships. But October came in as savior for the OEMs as the auto retail in the month witnessed an overall growth of 32 per cent jump year-on-year (YoY). Two-wheeler sales surged by 36 per cent, three-wheelers saw an 11 per cent rise, passenger vehicles increased by 32 per cent, tractors by 3 per cent, and commercial vehicles by 6 per cent. 

However, despite strong sales numbers, passenger vehicle OEMs continue to heavily stock dealers, resulting in inventory levels decreasing by only five days. The sustained inventory build-up indicates that the promotional offers and substantial discounts will continue until the end of the calendar year. Additionally, vehicle purchases witness a steep demand during wedding season as well, so, we can expect a surge in auto retail through November and December 2024 as well.

Thus, the festive season remain a critical period for the Indian automotive sector, as it traditionally account for 30–35 per cent of total annual auto retail. While OEMs often achieve record-breaking sales during this period, the need for strategic planning and robust inventory management is also essential to prevent overstocking and to ensure that dealerships can meet consumer demand without incurring excess stock costs.

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Utkarsh Agarwal

BW Reporters The author is the Editorial Lead of BW Auto World

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