India's overall auto retails decline significantly in September

The Federation of Automobile Dealers Associations (FADA) released Vehicle Retail Data for September'24.

In September 2024, overall retail sales of automobiles witnessed a significant decline of -9.26% Y-o-Y.

The two-wheelers (2W) segment registered a decline of 8.51% driven by weak consumer sentiment, low inquiries, and delayed purchases due to heavy rains and seasonal factors like Shraddh.

Passenger Vehicles (PV) sales fell steeply as it recorded YoY decline of 18.81%.

The commercial vehicles (CV) segment declined 10.45% Y-o-Y, with only marginal MoM growth of 1.46%, reflecting subdued market conditions and weak government spending.

The three-wheelers (3W) and tractor (Trac) segment saw a marginal growth of 0.66% Y-o-Y and 14.69% Y-o-Y respectively, attributed to positive customer engagement and increasing demand for e-rickshaw options.

 

H1FY25 witnessed an overall growth of 6.55% Y-o-Y with 2W, 3W and PV growing by 9.08%, 7.58% and 1.07% Y-o-Y. However, CV and Trac fell by 0.65% and 8.82% respectively.

FADA reported that PV Dealers facing all time high inventory levels of 80-85 days, equivalent to 7.9 lakh vehicles worth ₹79,000 crore due to aggressive OEM dispatches. Dealers are under financial pressure, with increased cash flow challenges.

FADA urges the RBI to issue stricter guidelines on channel funding policies to mitigate the financial risk faced by dealers.

While the festive season presents an opportunity for recovery, the high stakes in October make it crucial for Dealers and OEMs to clear existing inventory. Strategic inventory management and targeted festive promotions are key to capitalizing on the expected surge in demand and stabilizing market conditions.

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