Heavy discounting and improved product availability are expected to help offset weak consumer sentiment and a general year-end lull for the passenger vehicle (PV) segment, while some customers are deferring purchases for new-year models, Federation of Automobile Dealers Associations (FADA), said on Monday.

It also said that overall interest could increase  due to aggressive offers and end-of-year promotions. This sets a tone of cautious optimism, with a moderate chance of improved sales compared to November, it said.

In the two-wheeler (2W) segment, too, dealers suggest that while some buyers remain hesitant—either awaiting new-year models or influenced by subdued post-festive sentiment—others could be drawn by potential year-end discounts and stable rural demand. Although momentum may not be robust, incremental schemes and easing inflation could lend mild support, placing 2W on a cautiously positive footing, the retail industry body said.

Overall, with prospects of a bumper Kharif harvest likely to temper food inflation, the broader macroeconomic environment appears set to improve, potentially aiding consumer sentiment in the months ahead. However, the immediate December outlook derived from dealer feedback is mixed, CS Vigneshwar, President, FADA said while sharing the monthly retail sales data.

“While November was initially expected to build on its prior momentum, particularly due to the marriage season, dealer feedback suggests that this segment underperformed overall expectations. Although rural markets offered some support, primarily in the 2W category, marriage-related sales remained subdued. The late occurrence of Deepawali at the end of October also caused a spill over of festive registrations into November, affecting the month’s sales trajectory,” Vigneshwar said.

Rural demand impact

Although rural interest was present, it failed to significantly improve sentiment, he said, adding that the inventory levels have reduced by about 10 days, but they remain high at around 65-68 days. “FADA continues to urge original equipment manufacturers (OEMs) to further rationalise inventory so that the industry can enter the new year on a healthier footing, reducing the need for additional discounts,” he added.

On the monthly retail sales front, the PV sales declined by around 14 per cent year-on-year (YoY) to 3,21,943 units in November, compared with 3,73,140 units in November last year.

However, 2W retail grew by around 16 per cent YoY to 26,15,953 units during the month as compared with 22,58,970 units in November 2023. Three-wheeler (3W) sales also grew by 4.23 per cent YoY to 1,08,337 units last month as against 1,03,939 units in November last year.

Tractor sales also grew by 30 per cent YoY to 80,519 units in November as compared with 61,996 units in the corresponding month last year. But, commercial vehicle (CV) sales declined by six per cent YoY to 81,967 units in November as compared with 87,272 units in the same month last year, the FADA monthly data indicated.

Total sales across categories grew by 11.21 per cent YoY to 32,08,719 units in November this year as compared with 28,85,317 units in November 2023.