Auto Retail Sales Drop 9%, PV Inventory Rockets To Record High

Auto Retail Sales: Automobile retail sales in India declined 9 per cent year-on-year in September amid a massive buildup of passenger vehicle inventory due to sluggish demand, dealer's body FADA said on Monday.

Auto Retail Sales Drop In September 2024: Automobile retail sales in India declined 9 per cent year-on-year in September amid a massive buildup of passenger vehicle inventory due to sluggish demand, dealer's body FADA said on Monday, urging original equipment manufacturers to take corrective steps.

The overall registrations declined to 17,23,330 units last month from 18,99,192 units in September 2023, as most of the categories including passenger vehicles and two-wheelers witnessed a year-on-year (Y-O-Y) drop.

"Despite the onset of festivals such as Ganesh Chaturthi and Onam, dealers have reported that the performance has been largely stagnant," Federation of Automobile Dealers Associations (FADA) President C S Vigneshwar said in a statement.

Given the critical festive season around the corner, FADA urges OEMs (Original Equipment Manufacturers) to take immediate corrective measures to avoid a financial setback, he said.

This suggests that overall market sentiment during these festive periods has been underwhelming, with a trend leaning towards flat or negative growth, he added.

Passenger vehicle sales declined 19 per cent Y-O-Y to 2,75,681 units last month from 3,39,543 units in the year-ago period.

"Seasonal factors such as Shraddh and Pitrapaksha, coupled with heavy rainfall and a sluggish economy, have exacerbated the situation, leaving dealers with historically high inventory levels of 80-85 days' equivalent to 7.9 lakh vehicles worth Rs 79,000 crore," Vigneshwar said.

FADA also calls on the Reserve Bank of India to issue an advisory to banks, mandating stricter channel funding policies based only on dealer consent and on actual collateral, to prevent dealers from facing additional financial pressure due to unsold stock, he added.

This is the final opportunity for PV OEMs to recalibrate and support market recovery before it's too late, he said.

Two-wheeler retail sales saw a dip of 8 per cent Y-O-Y to 12,04,259 units due to low consumer sentiment, poor inquiries, and reduced walk-ins, FADA said.

Shraddh period and heavy rains further impacted demand, resulting in delayed purchases and a subdued market environment, it added.

Commercial vehicle registrations declined 10 per cent year on year last month to 74,324 units.

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, the industry body said.

Three-wheeler sales retail sales rose marginally to 1,06,524 units last month as compared with 1,05,827 units in September 2023.

Tractor sales rose 15 per cent year on year to 74,324 units last month.