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The Indian automotive industry experienced a welcome resurgence in October, driven by the festive season that brought a surge in consumer demand. Diwali and Dhanteras, significant festivals in India, fueled a nearly 20% year-over-year jump in passenger vehicle (PV) retail sales, according to industry estimates.
This surge in demand provided much-needed relief for automakers who had been grappling with sluggish sales for most of the year. Maruti Suzuki, India's largest passenger vehicle manufacturer, reported a record-breaking 202,402 retail sales in October, bringing their dealer stock down to a comfortable one-month level. The company's factory stock also plummeted close to zero, thanks to the robust sales.
The strong performance was attributed to the popularity of compact SUVs, with the Maruti Suzuki Brezza topping the sales charts. Despite a general slowdown in the hatchback segment, the WagonR performed exceptionally well. Other automakers like Mahindra & Mahindra and MG Motor India also saw significant gains, driven by the introduction of new models.
While October brought a sense of optimism, industry experts cautioned that the wholesale figures could moderate in November. This cautious outlook stems from broader challenges facing the automotive sector, including high temperatures, supply chain disruptions, and fluctuating consumer demand.
Despite these challenges, the festive season provided a much-needed boost for the industry. The success of this year's Dhanteras and Diwali celebrations was attributed to the easing of vehicle shortages and semiconductor issues that plagued the previous year. However, the industry is aware that the current surge in sales may not translate into sustained growth, and demand could remain subdued outside the festive months.
The overall retail sales for October are estimated to range from 470,000 to 490,000 units, marking a significant 20-21% increase compared to the 390,000 units recorded in the same period last year. While this growth is encouraging, analysts like Gaurav Vangaal from S&P Mobility cautioned that the industry could face new pressures as the year closes. Deeper discounts in December are anticipated to help further correct inventory levels, but the full impact on production schedules will become clearer in the first quarter of the next year.
The festive season, while providing a temporary respite for the Indian automotive industry, has highlighted the need for sustained growth drivers. The sector will need to address challenges related to supply chain, demand fluctuations, and consumer preferences to maintain its momentum in the coming months.
Source: Festive mood lifts automotive purchases in October, eases inventory pressure for automakers