Auto Sales Decline In Sept As Weak Consumer Sentiment, Heavy Rains Weigh On Demand
Passenger vehicle sales were particularly affected, plunging nearly 19 per cent compared to the same period last year
India's automobile retail market saw a sharp downturn in September, with sales falling 9.26 per cent year on year to 1.72 million units, according to the Federation of Automobile Dealership Associations (FADA).
The decline was the first monthly drop across all vehicle segments in the current fiscal year, reflecting a broader slowdown in the world's largest two- and three-wheeler market and third-largest car market.
Passenger vehicle sales were particularly affected, plunging nearly 19 per cent compared to the same period last year. Despite aggressive discounts and promotional offers, demand remained subdued, leaving dealers burdened with record-high inventory levels.
Passenger vehicle stockpiles reached 80-85 days’ worth, equivalent to 7,90,000 vehicles valued at around Rs 79,000 crore. The weak sales were due to seasonal factors such as the Shraddh period in September, heavy rains, and a sluggish economy, all of which dampened consumer sentiment and foot traffic at dealerships.
The drop in demand was not limited to passenger vehicles. Two-wheeler sales fell by 8 per cent as poor inquiries and reduced showroom visits hit the market. Commercial vehicle sales also declined, falling by 10 per cent, though certain regions saw marginal growth due to ongoing infrastructure projects. Overall, demand was impacted by extended monsoon conditions, low government spending, and seasonal challenges, creating a difficult environment for the auto industry.
While the market for three-wheelers showed slight growth, rising 0.66 per cent year on year, it was not enough to offset the broader weakness. Increased demand for electric rickshaws contributed to the uptick, but many customers deferred purchases in anticipation of festive season offers, further affecting overall volumes.
Urban India saw only marginal growth, with sales up by 0.14 per cent, while rural demand fell by 0.13 per cent, reflecting the widespread impact of the economic slowdown. Despite these setbacks, total vehicle sales for the first half of FY25 reached 11.9 million units, up 6.55 per cent from the previous year. However, with the early festive season failing to reignite demand, the industry is now pinning its hopes on the ongoing Navratri and Diwali celebrations for a much-needed recovery.
