India's Vehicle Market Accelerates with 32% Growth Thanks to Festive Season Rush

India’s vehicle sales saw a remarkable surge of 32% in October, reaching 28.33 lakh units compared to 21.44 lakh units in the same month last year. This growth was driven by increased discounts during the festive season and stronger rural incomes, according to the Federation of Automobile Dealers’ Association (FADA).

The growth was particularly evident in rural areas, which played a key role in boosting sales of two-wheelers and passenger vehicles. The rise in the Minimum Support Price (MSP) for rabi crops also helped support rural markets, FADA said.

Car sales jumped by 32.4% to 4.83 lakh units, largely driven by festive demand for sports utility vehicles (SUVs), along with new model launches and special offers. However, despite the strong demand, inventory levels remained high.

Two-wheeler sales saw a significant rise of 36.35%, with 20.7 lakh units sold, up from 15.14 lakh units in October 2023. Sales of three-wheelers increased by 11.45%, with 1.23 lakh units sold in October 2024.

Tractor sales also showed growth, rising by 3.08% to 64,433 units in October, compared to 62,542 units in the same month last year.

The combination of major festivals like Navratri and Diwali, along with festive offers, new model launches, and better stock availability, contributed to a strong boost in consumer demand. The rural market’s favorable conditions, including good crop expectations and a positive monsoon, further supported the growth in sales.

The 32% year-on-year rise in passenger vehicle sales, along with a 75% month-on-month increase, was also driven by festive demand, attractive offers, and new model introductions.

FADA is optimistic about continued growth in the automobile sector, especially with the upcoming wedding season. However, the association warned that challenges such as overstocked inventory and potential economic pressures could impact sales towards the year’s end, potentially leading to continued discounts.

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