Key Takeaways
- The retail vehicle sales have declined 9.26% in September, as per FADA data.
- The Shraddh period has negatively impacted sales, leading to a YoY decline in retail sales across various categories.
- The near-term outlook for the sector remains uncertain, despite dealers and OEMs betting on robust festive sales.
New Delhi: Overall retail vehicle sales slumped 9.26% year-on-year (YoY) in September 2024 to 17,23,330 units despite automakers offering discounts to prop up sales, according to data released by auto dealers’ body Federation of Automobile Dealers Association on Monday.
The total vehicle sales last year in September were 18.99 lakh units, a significant number that sets the stage for this year’s sales.
“Despite the onset of festivals such as Ganesh Chaturthi and Onam, dealers have reported that the performance has been largely stagnant. This suggests that overall market sentiment during these festive periods has been underwhelming, with a trend leaning towards flat or negative growth,” said FADA President C S Vigneshwar.
Vigneshwar said that Shraddh period (considered an inauspicious period when many people hold new purchases) further impacted sales negatively, leading to a YoY decline in retail sales across various categories. He further said that discounts and offers have been introduced across segments to stimulate demand, but these have yet to translate into a significant improvement in sales.
Passenger vehicle dealers are currently facing an unprecedented 80-85 days of inventory, equivalent to 7.9 lakh vehicles worth Rs 79,000 crore, a result of aggressive OEM dispatches.
As per the trade body, barring three-wheelers and tractors, which grew by 0.66% and 14.69% YoY, respectively, in September this year, other categories such as two-wheelers, passenger vehicles, and commercial vehicles fell by 8.51%, 18.81%, and 10.45% YoY, respectively.
The two-wheeler sales declined by 10% month-on-month (MoM) and 8.5% YoY due to low consumer sentiment, poor enquiries, and reduced walk-ins. Seasonal factors like the Shraddh period, Pitrapaksha, and heavy rains further impacted demand, resulting in delayed purchases and a subdued market environment.
FADA said that passenger vehicle sales plummeted by 10.8% MoM and 18.81% YoY, signalling an alarming trend of declining consumer demand and deteriorating market sentiment.
On the near-term outlook for the sector, the industry body noted that while dealers and original equipment manufacturers (OEMs) are betting on robust festive sales, especially in rural markets where positive cash flow and better agricultural conditions are expected to spur demand, the outcome remains uncertain.
“A successful October is essential to clear out excess inventory and set a positive growth trajectory for the remainder of FY25. With rising enquiries and optimistic dealer sentiments, the outlook leans towards optimism, but high stakes and dependency on October’s performance warrant a cautious approach,” it said.
