It is a bumper Diwali 2024 for carmakers amid a slow year. The decision taken by most manufacturers to build up inventory ahead of the festive season is paying off, with passenger vehicle registrations already reaching a record 4,25,000 units as of October 29, according to Vahan data. The previous peak for passenger car registrations was 3,99,112 units in January 2024. There is even potential to hit the 4.5 lakh milestone by the end of the month should the current daily registration rate of 14,732 units continue.
- Peak festivities in October created concentrated period of high demand
- Maruti, Tata see double-digit growth in registrations
- Dealer inventory reduced to healthier levels
The surge in registrations can be attributed to a unique occurrence this year. The peak festivities of Navratri, Dussehra, Dhanteras, and Diwali, which are typically spread across two months, all fell in October this year, creating a concentrated period of high demand.
This current figure of 4.25 lakh units encompasses private cars and cabs listed on the Vahan portal. On average, monthly vehicle registrations in 2024 have been approximately 3,33,000 units, marking a 5 percent rise over the previous year's monthly average and bringing year-to-date registrations to an impressive 33 lakh units. In 2023, total passenger car registrations reached 38 lakh units, with the final two months contributing a notable 6.5 lakh units.
Maruti Suzuki festive season sales
Unsurprisingly, carmakers are resetting their expectations, anticipating a promising festive season. “This month, we aim to deliver at least 2 lakh vehicles and reduce inventory across the network. By month-end, our network inventory should be around 30 days,” stated Partho Banerjee, senior executive officer, marketing and sales, Maruti Suzuki.
In its post-earnings conference call, Maruti Suzuki revealed that festive sales volumes (from Shradh to Diwali) have grown by 14 percent year-over-year, and is targeting 3-4 percent retail volume growth for FY25. Additionally, management highlighted that the rural market outperformed urban areas in the second quarter, with rural growth contrasting a decline in urban market retails year-over-year.
Tata Motors festive season sales
A spokesperson from Tata Motors shared that the festive period has fueled a 30 percent year-over-year increase in October registrations, positioning this month as the company’s highest-ever. “On Dhanteras, we will deliver over 15,000 vehicles, backed by strong demand across our portfolio, including recent launches,” they remarked.
The spokesperson also said the company has seen strong growth, with a 30 percent increase in registrations in October 2024 compared to October 2023. “As a result, this October, the total registrations for Tata Motors are expected to be the highest ever. On Dhanteras, we will be delivering more than 15,000 vehicles on the back of robust demand for the entire portfolio, including new launches,” the spokesperson added.
New car registrations and dealer inventory
Interestingly, registrations gathered momentum only in the last week, with registration shooting up by over 1 lakh units.
Sanjay Thakker, chairman and executive director of Landmark Cars, a leading automotive dealer, says the sentiment is positive right now, and the offtake has increased across all brands. “The month of October should be very good, and we hope to sustain this next month. The month started moderately, but there is momentum in the market right now, and the month should end on a healthy note.”
In the first three weeks, from October 3 to 24, passenger vehicle registrations were merely 2 percent, with 3,07,000 units registered, compared to the three weeks of the festive period starting with Navratri in 2023.
With robust deliveries in the last week, the stock at dealerships is also likely to see correction. At the beginning of the festive season, the inventory stood between 7,50,000 and 8,00,000 units, equivalent to two and a half months of wholesale volume. For the first time in five months, retail registrations are set to surpass wholesale volumes by 70,000 units, helping the dealerships reduce stock.
This positive trend in registrations is encouraging for the automotive market as it indicates strong demand and healthier inventory levels heading through the festive season. Gaurav Vangaal, associate director at S&P Global Mobility, says retail sales are set to be the highest ever, which may help ease the pile-up of inventory. “It will be interesting to watch if the momentum continues. Like every year, the current quarter will have a seasonality impact, the real picture will be visible only in the January to March quarter," added Vangaal.
With inputs from Ashutosh Radhey Shyam
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