Speed bump: Decrease in car sales in the domestic market due to storage
Business Business: Domestic passenger vehicle (PV) wholesales for top carmakers Maruti Suzuki India (MSIL), Tata Motors, Hyundai Motor India (HMIL), Mahindra & Mahindra (M&M) and Toyota Kirloskar Motor (TKM) declined 1.6 per cent year-on-year (Y-o-Y) to 304,381 units in July. The decline came as carmakers had to rationalise dispatches amid high dealer inventory. However, sales of TKM and M&M grew 42.25 per cent and 15 per cent, respectively,
while MSIL, Tata Motors and HMIL witnessed a decline of 9.6 per cent, 6 per cent and 3.3 per cent, respectively. In July, rating agency ICRA reported that inventory holding at PV dealerships has increased to 62-67 days (compared to an average of 30-35 days) by June 2024. According to the Federation of Automobile Dealers Associations, the growth was due to stagnant production and a slowdown in retail sales due to extreme heat and the Lok Sabha elections impacting retail footfalls.
“Inventory levels are expected to remain high in the near future, impacting dealership margins,” ICRA said. MSIL, the country’s largest PV company, saw wholesales decline 9.67 per cent to 137,463 units. Sales in its utility vehicle segment declined from 62,049 units in July 2023 to 56,302 units in July 2024. Mini segment cars (Alto and S-Presso) remained stable at 9,960 units, while sales of compact segment cars (Baleno, Celerio, Dzire, Ignis, Swift and WagonR) declined 12.5 per cent. Tata Motors sold 44,725 units, including electric vehicles (EVs), in July as demand for fleet cars declined with the discontinuation of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme.
