INDIA REPORT
This year’s festive season fired up vehicle registrations but failed to match 2019 sales numbers. Vehicle sales, which peak during the festive season in India, account for about 40% of annual volume. Sales in the just-concluded season this year were better than in the past two COVID years but were far below the sales level of 2019.
“Auto Retail for October 2022 saw an overall growth of 48%,” said Manish Raj Singhania, president of FADA. With most of the month under the festive period, the sentiments were extremely positive across all categories of dealership outlets.”
Source: Economic Times Read The Article
PSR Analysis: In India, the festivals drive sentiment buying and the three-day period of Dhanteras, Choti Diwali and Badi Diwali boosts major demand. This year, starting with Dhanteras on Oct. 22 to Diwali on Oct. 24, the industry’s Passenger Car volumes are estimated to be around 54,000 units, higher than the last two years but still lower than the 70,000 units sold in 2019. That’s about a 10% increase over last year, but still less than 2019-sales.
Weaker rural demand was a major problem for the automobile sector. However, industry representatives believe that market sentiments have improved in the rural region. New launches and good customer schemes provided traction to the segment.
As farmers have started receiving their crop revenues, there is an overall positive sentiment and positive cashflow. To ensure high growth of vehicle sales, it is important for the two wheeler segment to consistently grow for at least 3-4 months. There will be constant growth of commercial vehicle sales due to increasing infrastructure projects and CAPEX.
Going forward, we believe there are many possible headwinds for the passenger cars and SUV segments: liquidity, inflation, high commodity prices, economic growth, and affordability. PSR
Aditya Kondejkar Is Research Analyst – South Asia Operations, for Power Systems Research
