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Informist, Monday, Oct. 7, 2024

 

By Anand JC

 

MUMBAI – Passenger vehicle retail sales between April and September continue to lose momentum. The segment sales in the first half of the ongoing financial year were down 1% on year, compared to growth of 8.4% in the same period of the last fiscal year, as per calculations by Informist based on data from the Federation of Automobile Dealers Associations. Dealers in India sold 1.82 million units in Apr-Sept, down from 1.84 million units in the corresponding period last year.

 

In Apr-Sept FY23, passenger vehicle sales rose 37.4% on year to 1.7 million units. During the corresponding period of FY22, sales grew 74.8% on year to 1.24 million units, supported by pent-up demand post the COVID-19 pandemic. By comparison, segment sales declined 44% on year to 707,584 million units in the year-ago period.

 

Even on a full-year basis, a similar trend was seen in passenger vehicle sales. In FY24, passenger vehicle sales rose 7.6% on year to 3.9 million units, lower than the 20% growth seen in FY23 at 3.6 million units. Sales had grown 27.8% to slightly over 3 million units in FY22, while in FY21, they had dropped 15% to 2.4 million units.  

 

On a month-on-month basis, too, passenger vehicle sales have switched to a lower gear. So far in FY25, segment sales have fallen sequentially in four of the six months. Passenger vehicle retails have dropped over 10% on a monthly basis 14 times in the last 63 months, analysis of data provided by FADA shows.

 

RECENT TREND

Passenger vehicle retail sales in Apr-Sept were impacted by inclement weather conditions and the General Election to start with. The auto lobby body had hoped that festivals such as Ganesh Chaturthi and Onam would lift consumer sentiment, especially in urban areas. However, dealers reported a stagnant performance in September. The association, which represents over 15,000 automobile dealerships across India, said a sluggish economy further exacerbated the situation.

 

In September, passenger vehicle sales declined 10.8% sequentially and 18.8% on year, signalling an alarming trend of declining consumer demand and deteriorating market sentiment, FADA President C.S. Vigneshwar said in a press release Monday. The on-year drop of 18.8% in passenger vehicle sales in September was the steepest since November 2021, when retail sales fell 19.4%.

 

On the inventory front, passenger vehicle dealers in India currently have a historically high 80–85 days of stock. In August, the segment inventory stood at 70-75 days. The ideal passenger vehicle inventory is considered to be around 30-35 days. The auto lobby body has warned that dealers could face significant financial pressure from unsold stock piling up at their warehouses.

 

Overall automobile retail sales were at 1.7 million units in September, down 9.3% on year, a near-one-year low. On month, the sales dropped 8.9%. In September, while sales of three-wheelers and tractors rose on year, volumes of other categories such as two-wheelers and commercial vehicles fell. On a sequential basis, while retail sales of commercial vehicles and three-wheelers rose, volumes of other segments fell.  End

 

Edited by Avishek Dutta

 

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