The Lok Sabha elections, end of marriage season and ongoing heat wave across key markets, has all resulted in an adverse effect across the automotive sector in the country
As per the data released by Society of Indian Automobile Manufacturers (SIAM), during FY2024, total Passenger Vehicle sales stood at 42,18,746 units. This resulted in a YoY growth of 8.4% when compared to 38,90,114 vehicles sold during the periods April 2022 to March 2023. However, this positive trend has not spilled over into the new financial year where waning passenger vehicle registrations have been noted across the first two month of FY2024-25.
Car Inventory in India – Slow Sales to Spill Over to June 2024
Various factors, such as the uncertainties surrounding the ongoing elections, end of marriage season and rising temperatures across key markets along with high rates of interest have resulted in a severe waning in passenger registrations by around 5% in May 2024.
This could result in hefty inventory with automakers to the extent of around 4 lakh units, totally valued at around Rs 44,000 crores till the end of May relating to a 4 year high. Planned production shutdowns along with hefty discounts and buyer benefits are expected to be resorted by some automakers so as to balance out stocks.
Vinkesh Gulati, Chairman of Research at Federation of Automobile Dealers Associations (FADA) says that not only has the industry had to contend with lower sales across April and May 2024, but this sluggish trend is also expected to spill over into June 2024. It is also set to extend to the festive season later this year following which there could be an increase in demand.
A favourable election outcome, lower interest rates, new model launches and predictions of a normal monsoon could stir up passenger vehicle sales. It is also expected that considering piling stocks, dealership discounts and special consumer incentives through the month of June 2024 could relate to a growth by 15-20%.
Car Sales Report for April 2024
Most leading automakers in India have reported subdued sales over past months. Maruti Suzuki for example, posted PV sales at 1,37,952 units in April 2024a flat growth over sales in April 2023. New model launches, among which was the recently introduced Swift hatchback, the upcoming DZire sedan and Maruti eVX in the electric four wheeler segment could offer some respite in terms of sales.
Hyundai also reported flat sales growth in April 2024 with only the Creta and Exter posting improved demand while all other models in the company portfolio faced declining sales. Hyundai also plans to boost their portfolio with new launches, among which will be new SUVs. These will include the facelifted Alcazar, new Tucson and an electric version of the Creta.
Tata Motors saw its sales grow by just 1.86% YoY again with most of its portfolio in the red except for the Punch and Altroz. The company now plans launch of the Tata Curvv SUV in petrol, diesel and electric versions. On the other hand, Toyota has seen increased demand while announcing a 32% YoY growth and Mahindra sales also escalated by 18%. The new XUV3XOin the compact SUV space, launched in April 2024, which came in at a starting price of Rs 7.49 lakh (ex-showroom) is set to draw in increased sales thanks to its new comfort and safety features along with outstanding performance that it exudes.
