Indian auto dealers' body forecasts strong festive season

BENGALURU, Oct 09 (Reuters): India's retail vehicle sales rose 20 per cent in September, a dealers' body said on Monday as it forecast a strong festive season, with easing monsoon worries and higher rural demand helping sentiment.
With a 42-day festive season just around the corner, the Federation of Automobile Dealers Association (FADA) also said it shifted its stance from 'cautiously optimistic' to 'optimistic'.
India's festive season usually sees strong retail purchases, which FADA hopes will ease inventory buildup.
It added that favourable monsoon patterns, with India receiving 94 per cent of the expected rainfall, set a positive backdrop for the period.
Retail sales of vehicles rose 20.4 per cent in September to 1,882,071 units, with passenger vehicle (PV) volumes increasing 19 per cent, FADA data showed.
Two-wheeler sales jumped 21.7 per cent, as the segment benefitted from the introduction of new models and attractive promotional offers, while a recovery in rural demand also improved sentiment.
Sales of three wheelers, meanwhile, rose 48.6 per cent to 102,426 units, surpassing record highs hit in July and August.
However tractor sales, is a key indicator of rural economy, fell 10 per cent in September. Last week, tractor maker Escorts Kubota reported an 11.2 per cent fall in its total sales.
Automaker Mahindra and Mahindra also reported a 1 per cent fall in tractor sales. However, Mahindra's Swaraj division posted a 12.3 per cent rise in sales.
FADA also issued caution around highest-ever inventory levels and said inventory days - an indicator of retail demand - ranged from 60-65 days in September for PVs, up from 58-63 days in August.
Higher inventory days indicate dealers are storing vehicles for longer before being able to sell them.