India’s festive auto story is 2-wheeled & electric

India's two-wheeler market experienced record September sales, fueled by increased festive buying, while electric vehicles hit their highest-ever monthly retail sales, marking a strong start to the crucial holiday season, according to data from the Federation of Automobile Dealers Associations (FADA). Two-wheeler sales surged 33.08% year-on-year to 17.9 lakh units, setting a new record for the segment, with urban and rural markets growing almost equally, with sales up 33.11% and 33.06% respectively from the previous year.

The substantial growth was primarily driven by a weak base, as buyers had delayed purchases ahead of the GST 2.0 rollout later in the month, resulting in an unusually high year-on-year jump. However, the positive trend was further supported by sequential growth and strong performance in the first half of the year, with two-wheeler sales increasing by 20.43% from April to September.

Electric vehicles played a significant role in the market, accounting for 11.58% of September sales and bringing overall EV penetration to nearly 13%. In three-wheelers, electric vehicles dominated, making up 64.9% of retail sales. This trend was also evident in passenger vehicles, with alternative-fuel vehicles including CNG, hybrids, and EVs comprising about 41% of sales, nearly matching the combined share of petrol and ethanol vehicles at 41.27%.

As the festive season progresses, urban two-wheeler sales rose 5.29% from August, while 63% of dealers reported that booking pipelines were expanding. FADA predicts that October sales will grow as the Navratri and Dussehra festivals approach, with 75.57% of dealers anticipating increased sales during this period. However, the festive period also presents challenges, including rising vehicle prices and inventory management concerns.

FADA maintains cautious optimism about the next three months, with 78.28% of dealers expecting continued sales growth for the two-wheeler market.