Indian car sales surge 32.4% in October driven by festive demand and SUV popularity

Indian car dealers enjoyed a 32.4% rise in sales this October compared to last year, driven by the festive season and new car releases. The Federation of Automobile Dealers Association (FADA) reported dealers sold 483,159 vehicles in October, up from 364,991 units the previous year, reported Reuters.

This year's earlier start to the festival season, a popular time for large purchases, contributed to the sales jump.Customers embraced new models and special offers, particularly for Sport Utility Vehicles (SUVs).However, this retail sales surge didn't translate to wholesale.

Carmakers saw flat or slightly lower sales to dealerships last month, except for SUVs, which remained a strong segment.This discrepancy between retail and wholesale sales has led to a buildup of unsold inventory at dealerships. FADA noted that the average "inventory day" – the time a car spends in a showroom before being sold – increased to 75-80 days in October.

This is significantly higher than the recommended one-month timeframe.“As a result, discounts may continue until the end of this year,” warned FADA.While smaller cars make up the bulk of unsold inventory, the proportion of unsold SUVs is also on the rise.

Both car manufacturers and dealers have pointed to the unusually hot summer and subsequent heavy rains between April and September as deterrents for customers visiting showrooms. Many buyers seem to have delayed their purchases, hoping for better deals during the festival season.

FADA will release combined sales figures for the 42-day period covering October and November on November 14th. This change in reporting timeframe accommodates the shifting dates of the festival season this year.