The annual season of festivals and big fat Indian weddings has let India’s automobile sector move beyond the global chip shortage woes and a pandemic-triggered slowdown.
The industry registered a 26% growth last month as compared to November 2021, with the thrust coming from across categories, according to the Federation of Automobile Dealers Associations (FADA).
“November 2022 has clocked the highest retails in the history of the Indian automobile industry with March 2020 as an exception when retails were higher due to BS-4 to BS-6 transition,” said FADA president Manish Raj Singhania.
Why vehicle sales are growing in India?
The robust sales, coming amid global inflationary fears, have been driven by the festive months and Indians’ propensity to “gift” well at weddings, experts said.
Buying a new vehicle is deemed auspicious during the September-November festival season.
The wedding season—Nov. 14 to Dec. 14 this year, according to FADA —followed right after.
“Indians believe in the culture of spending big on gifts during weddings, and as a result, they always end up buying vehicles, boosting the sales of both two and four-wheelers,” Shruti Saboo, associate director at credit rating firm, India Ratings and Research, told Quartz.
More than 3 million weddings were estimated to be scheduled for this period, potentially boosting business across various segments. A good number of people would make bookings much earlier.
Another factor during this time, according to Saboo, is the prospective groom or bride’s need to upgrade. “Married couples want to upgrade and invest in new cars or two-wheelers to start the new chapter of their lives.”
Will the uptick in the Indian auto sector sustain?
Healthy auto retails were also supported by the Reserve Bank of India’s consumer confidence data which remain on the recovery path, FADA said.
But things may not remain rosy. “The central bank’s continued rate hikes and the lockdown in China may play spoilsport in the near term,” the industry body has said.
Experts, however, remain optimistic.
While the recent interest rate hike could make auto loans more expensive, the two-wheeler and entry-level passenger vehicle segments remain in good shape, said Kumar Saurav, global mobile business head at Jaipur-based marketing firm, AdCounty Media.
“It’s because of the fresh launches, improved model mix available from previous months, and rising rural demand,” Saurav said.