Domestic car sales in India for major automakers like Maruti Suzuki, Hyundai, and Tata Motors declined in September 2024. While domestic sales of Maruti Suzuki and Tata Motors dropped by 3.9 per cent and eight per cent on a year-on-year basis, respectively, Hyundai's retail numbers too dropped by 5.8 per cent last month.

Automakers' organisation Society of Indian Automobile Manufacturers (SIAM) has reported that passenger vehicle retail sales have slowed down drastically between April and August this year, registering a mere 0.7 per cent growth, which is significantly down from eight per cent recorded during the same period of 2023. The industry body has attributed this sales slowdown to the fact that demands for passenger vehicles have tapered off after roughly two years of surging growth.

The industry data further revealed that levels of unsold cars increased to a record 70-75 days in August. Factors like skyrocketing inflation, economic insecurities, and rising cost of ownership have played key roles in this sales slowdown. The lukewarm demand for PVs has resulted in pent-up stock at the dealerships, which has forced the auto companies to cut their sales to dealers.

Small car sales slumped

The small car segment in India has been reeling under pressure for quite some time and this trend continued in September as well. Rising demand for SUVs and crossovers has pushed small cars to the back. Maruti Suzuki's domestic PV sales in the small and mid-sized segments dropped by 11 per cent. Both the small and mid-size segments contribute about half of Maruti Suzuki's overall sales and the sales decline impacted the overall numbers in the process.

EV tax rule change impacted Tata's sales

Certain tax rule changes for electric vehicles impacted Tata Motors' retail sales adversely in September. The homegrown carmaker registered sales drop for a fourth straight month in September. It blamed the high inventory as well as the expiry of the government's FAME scheme, which helped the growth of electric cars in India. Also, Tata Motors blamed the lapse of road tax waivers on EVs in certain states for this sales decline.

SUVs register growth

The SUV segment in India in September grew as dealers stocked up anticipating a surge in demand and sales during the festive season, which will run from early October to early November. Buoyed by the rising demand for utility vehicles, Mahindra, which is among the top SUV makers in the country has witnessed its market share increase by 24 per cent on a year-on-year basis. Among other major SUV players, Toyota and Kia posted sales growth of 14 per cent and 17 per cent, respectively, including exports.

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