SUVs push car sales in India jump by 32% in October, yet unsold car stocks rise

Indian dealers' car sales increased 32.4% in October, helped by festive demand, especially for sports utility vehicles (SUV), as well as new model launches and offers, but inventory levels remained high, a dealers' association said on Wednesday.

Sales by dealers to customers rose to 483,159 units in the month from 364,991 units last year, according to data from the Federation of Automobile Dealers Association (FADA).

This year, the festival season -- an auspicious time during which Indians typically make big-ticket purchases -- started in early October, compared with mid-October last year, lifting sales in the month.

And while that helped retail sales clock double-digit growth, wholesales, or carmakers' sales to dealers were flat or inched lower last month, with SUVs sales the lone bright spot.

But despite the slow wholesales and strong retail sales, a car stayed in a showroom five additional days, on average, in October before being sold, increasing the so-called inventory days to 75–80, versus the recommended level of about a month, FADA said.

As a result, discounts may continue until the end of this year, the dealers' body said.

While the unsold vehicles have mostly comprised small cars, the proportion of SUVs has been inching up, FADA said.

Carmakers and dealers have said that extreme heat and then heavy rains have curtailed showroom visits from April to September, with many customers having delayed purchases until the festive period in the hope of bagging higher discounts.

FADA will report retail sales for a 42-day period spanning October-November on Nov. 14, taking a longer timeframe to account for the different festival dates this year and last.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.