Indian car sales fall after 10 quarters of growth

Indian carmakers’ sales to dealers experienced their first decline in ten quarters during the July-to-September period, marking a significant slowdown in the once-booming demand for larger vehicles.

Automakers sales to dealers in July, August and September declined on aggregate by 1.8 per cent year-on-year to around 1.06 million units in the second quarter, based on Society of Indian Automobile Manufacturers (SIAM) data. This marks a slowdown from 4.7 per cent growth in the previous year to 3 per cent in the April-to-June quarter.

The decline in automaker sales was even more pronounced when compared to the 4.5 per cent drop in dealer sales to consumers during the same period, as per data from the Federation of Automobile Dealers Associations (FADA).

Both automakers and dealers have attributed the declines to unusually heavy rainfall in June and July. Additionally, the pre-festive season period, typically a favourable time for large purchases, fell entirely in September this year, unlike last year when it extended into October.

The growth in sales of utility vehicles, including SUVs, slowed significantly to 9 per cent in the quarter, down from 23.5 per cent in 2023. SUVs have been a major driver of the industry for three years, accounting for roughly two-thirds of total sales.

The slowdown in SUV sales was compounded by a nearly 20 per cent decline in small car sales, hurting market leaders Maruti Suzuki and Tata Motors, as well as Hyundai India.

Attribution: Reuters

Subediting: M. S. Salama