As per data available with the industry body, sales of cars, sedans and utility vehicles went up by a modest 0.5% to 2,081,143 units between April and September FY25, signalling a weakening of demand in the third largest automobile market in the world. Passenger vehicle sales in India rose by 8.4% to a record 4.22 million units in FY24.
Chandra said, “The expectation was slightly better than (sales growth being) flattish. While April was good, sales in May and June did not play out as per expectation, which impacted industry volumes adversely. In September too, two weeks of Shraddh (considered by consumers as inauspicious for making purchases) affected retails. But now with the start of festival period, sales on-ground seem to be doing well.”
Good monsoons, healthy crop yields is expected to put more money in hands of customers in rural markets, boosting demand in the coming month and thereafter during the wedding season starting November. But even if demand momentum remains good in the second half of the financial year, passenger vehicle sales will grow at less than 5% in FY25, on a high base, Chandra informed.
Sales of commercial vehicles declined by 4.2% to 445,004 units between April and September FY25. Two-wheeler sales rose by a robust 16.3% to 10,164,980 units in the period under consideration led by demand in urban centres. Wholesale volumes of three-wheelers too went up by 9.8% to 373,799 units in the first half of the fiscal.
“The high base is the main reason (for flat growth in car sales). Last year, the industry recorded 4.2 million units annual sales. The demand is strong and that is why the domestic sales remain at that level. Generally, at a CAGR (compounded annual growth rate) level, the growth rate of the industry is similar to the level of GDP. So, it should be 6-8% (just like GDP) in the coming years,” Chandra noted.In the second quarter, Chandra said, overall automobile industry reported a “reasonable performance”, growing by 8.9% Two-wheelers and three-wheelers continued to post strong growth of 12.6% and 6.6%. respectively. But sales of passenger vehicles and commercial vehicles declined last quarter due to heavy rainfall in key states. Passenger vehicle sales fell by 1.8% 1,055,137 units last quarter, but managed to cross the 1 million mark in quarterly sales for the third time. CV sales dropped by 11% in the same period.“With the rains easing and continued infrastructure spending, and the arrival of the festive season boosting consumption, we anticipate healthy demand in the next (third) quarter”, Chandra said.
In September, passenger vehicle sales fell for the third straight month by 1.4% to 361,717 units as automakers clamped down on dispatches to rationalise stocks at dealerships. Three-wheeler sales grew by 6.7% to 79,683 units in the month under review. Two-wheeler sales went up by 15.8% to 2,025,993 units last month, as per SIAM data.