Some look for future in tea leaves. Economists have looked for future outlook at anything from underwear to lipstick sales. One sharp indicator for the Indian economy has been the sales of automobiles. And the leaves do have frown lines aplenty.
India’s auto sector seems to have salvaged itself up by the skin of its teeth as far as festive sales go—October was supposed to be a bumper month with the entire peak shopping period from Navratri to Diwali landing up in the autumnal month, and while the end figures are a solace, the data does point out to some ominous patterns.
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Primary among this seems to be the indication that a bumper month was anything but that. This despite the final figures scoring high sales in many categories, especially premium cars and bike sales. Many outlets had indicated that it was but a last-minute surge in shopping in the last few days before Diwali that offered the beleaguered industry a face saver.
Even there, the performance of commercial vehicles and three wheelers poses a question mark over the larger fate of the economy. For example, three-wheeler sales fell by a sharp 2 per cent compared to the corresponding period last year. And so did goods carriers and e-rickshaws.
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“October 2024 saw two major festivals Dussehra and Diwali, both occurring in the same month, which traditionally drive higher consumer demand providing a significant boost to auto industry’s performance,” Rajesh Menon, director general of the auto industry body SIAM, said, adding that “however, three-wheelers marginally de-grew by (-)0.7 per cent compared to October of previous year, with sales of 0.77 lakh units in October 2024”.
The problem with this? Three-wheelers and goods carriers all do the hard work when it comes to small and medium enterprises, be it in urban or semi-rural areas. And any consistent drop in their sales means it is simply not business-as-usual in the Indian hinterland.
Even in categories seemingly showing growth (albeit during the festive season; there are major worries on how sales may plummet once the festive season gets over with the new year) like passenger cars, OEMs are very clearly going slow in their production, as if anticipating a cyclical economic downturn that everyone’s been bracing for. And that, the sales trend in at least certain categories seem to be clearly indicating.
