More Stories

Informist, Monday, Oct. 7, 2024

 

Please click here to read all liners published on this story

--FADA: Sept passenger vehicle retail sales at 275,681 units 
--FADA: Sept passenger vehicle retail sales down 18.81% on year 
--FADA: Sept 2-wheeler retail sales 1.20 mln units, down 8.5% on year 
--FADA: Sept CV retail sales 74,324 units, down 10.5% on year 
--FADA: Sept 3-wheeler retail sales 106,524 units, up 0.7% on year 
--FADA: Sept tractors retail sales 62,542 units, up 14.7% on year 
--FADA: Sept total vehicle retail sales 1.72 mln units, down 9.3% on year 
--FADA: Market sentiment during Ganesh Chaturthi, Onam underwhelming 
--FADA: Discounts, offers yet to translate into significant sales growth 
--FADA: 2-wheeler sales down on low consumer sentiment, poor inquiries 
--FADA: 2-wheeler sales down on reduced walk-ins 
--FADA: Lower PV sales signal alarming trend of declining consumer demand 
--FADA: Lower PV sales signal alarming trend of deteriorating mkt sentiment 
--FADA: Urge OEMs to take immediate measures to avoid financial setback 
--FADA: Cautiously optimistic about retail sales during Navratri, Diwali 
--FADA: See financial pressure on dealers if PV sales don't pick up in Oct 
--FADA: PV dealers carrying all-time high inventory of 80-85 days 
 

 

MUMBAI – India's overall automobile retail sales declined 9.3% on-year in September due to weather-related disruptions and weak demand during festivals like Ganesh Chaturthi and Onam, according to the Federation of Automobile Dealers Associations. The weakness in demand was further accentuated by the inauspicious Shraddh period falling in the month.

 

Dealers sold a total of 1.72 million vehicles in September, against 1.90 million units in the year-ago period and 1.89 million vehicles in August. While sales of three-wheelers and tractors rose on year, volumes of other categories such as two-wheelers, passenger vehicles, and commercial vehicles fell. On a sequential basis, while retail sales of commercial vehicles and three-wheelers rose, volumes of other segments fell. 

 

"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," C.S. Vigneshwar, president of the Federation of Automobile Dealers Associations, was quoted as saying in a press release.

 

"The Shraddh period further impacted sales negatively, leading to a year-on-year decline in retail sales across various categories. Discounts and offers have been introduced across segments to stimulate demand, but these have yet to translate into a significant improvement in sales," Vigneshwar said.

 

In September, two-wheeler retail sales, which account for around 70% of total vehicle sales, fell 8.5% on year and 10% on month to 1.20 million units due to low consumer sentiment, poor enquiries, and reduced walk-ins. Seasonal factors like the Shraddh period and heavy rains further impacted demand, resulting in delayed purchases and a subdued market environment, Vigneshwar said.

 

In the passenger vehicle category, retail sales plummeted by 18.8% on year and 10.8% sequentially to 275,681 units. As a result, the passenger vehicle inventory has now reached historical high levels of 80–85 days, which is equivalent to 790,000 vehicles worth INR 790 billion.

 

The association has urged manufacturers to take immediate corrective measures to avoid a financial setback. "FADA has also asked the Reserve Bank of India to issue an advisory to banks, mandating stricter channel funding policies based only on dealer's consent and on actual collateral, to prevent dealers from facing additional financial pressure due to unsold stock. This is the final opportunity for passenger vehicle original equipment manufacturers to recalibrate and support market recovery before it's too late," Vigneshwar said.

 

In September, retail sales of commercial vehicles fell 10.5% on year but rose by 1.5% sequentially to 74,324 units. Light vehicle sales accounted for nearly 56% of the segment sales, followed by the heavy and medium segment volumes. "While there was positive sentiment and marginal growth in regions supported by infrastructure projects, overall demand remained weak due to low government spending, extended monsoon delays and seasonal challenges. Despite some improvement in fleet purchases, the market conditions remain subdued," Vigneshwar said. 

 

Three-wheeler retail sales rose marginally by 0.7% on year and 1% on month to 106,524 units in September. Sales of internal combustion engine rickshaws, used for ferrying passengers, rose by 5% on year and 1.5% sequentially to 48,714 units, while those of electric variants fell 5.7% on year and 0.7% on month to 44,043 units. 

 

"The three-wheeler sales showed marginal growth... driven by positive customer engagement and increasing demand for e-rickshaw options. However, overall demand remained subdued as many customers deferred purchases in anticipation of the upcoming festive season and heavy rains impacted walk-ins and sales activity," Vigneshwar said. In September, sales of tractors rose the most, by 14.7% on year, but were down by 4.5% sequentially to 62,542 units.

 

On the near-term outlook for retail sales of vehicles in India, the association remains cautiously optimistic, as both Navratri and Diwali festivals will fall in the same month, creating strong expectations for a surge in vehicle sales in October. With healthy water levels in reservoirs and improved crop yields supporting rural demand, the festival season is expected to drive a substantial boost in two-wheelers, passenger vehicles, and tractors sales with new launches planned for the month, the association said.

 

About the passenger vehicle sales, the association said the segment faces a critical situation due to high inventory levels at dealerships. If sales do not pick up as expected in October, dealers could face significant financial pressure from unsold stock piling up in their warehouses.

 

"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," the association said.  End

 

Reported by Darshan Nakhwa 

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.