Auto Sector
The discounts propelled the sales of auto vehicles in this period.Credit: Reuters

The festive season has brought much-needed respite to the auto dealers as retail sales of vehicles registered growth in October, riding on the attractive festive season offers.

As per the data from the Federation of Automobile Dealers Associations (FADA) of India, the retail sales of passenger vehicles - that is the highest part of the all the vehicular sales in the country - soared more than 11 percent year-on-year basis in October to 248,036 units.

The reason attributed to this jump is the heavy discounts offered by the Auto players. Moreover, the overall vehicle registrations jumped by 4 percent to 1,709,610 units in October, as against 1,638,832 during the same period a year ago.

Business Standard reported that in contrast, the sales of heavy commercial vehicles tanked 23 percent to 67,060 units in October. This is largely due to the slump in economic activity and overcapacity with fleet owners because of an increase in freight-carrying capacity of trucks.

Ashish Harsharaj Kale, president of FADA said, "October retail sales were in the positive, giving the much-needed respite to the auto industry and especially the dealer community after months of degrowth."

The festive season brings cheer to Auto dealers

Major auto players had announced attractive discounts during Diwali and Dussehra festivals as the industry was witnessing a continuous slump in the sales for the last year. Kale said that during the festive season, the dealerships across the country saw high footfall. He said, "The consumer sentiment was positive, and purchase decisions were concluded as (they) used to be during the growth years."

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Reuters file

Kale showered praises on the automakers for offering discounts that drastically cut down the inventories, which at one point in time had reached a worrying level. He said, "Although not at FADA-recommended levels of 21 days, two-wheeler inventory has reduced from an alarming level. Passenger vehicle inventory, already at reasonable levels, has reduced further."

The dealers association expects the industry to be stable in the near term with customer's sentiment turning positive. Kale said, "FADA continues its recommendation to its members to tread with caution, especially with regard to inventory and costs during this dynamic time of fluctuating consumer sentiment due to overall weak economic situation and Bharat Stage VI transition."