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NEW DELHI: After nearly three years of bumper growth,
car sales
have started to show signs of weakness as demand has come down over the past few months on a high base and other negatives such as severe summer heatwave, uncertainty around elections, and expensive vehicles.
The Indian car market had bounced back strongly after the Covid setback and closed 2023 with record sales of 41.1 lakh units.
However, the market has seen a squeeze in demand in recent months, which many fear will mean low-to-flat growth for the full year.
The numbers in June saw
Maruti
and
Hyundai
, the top two carmakers, report weak growth in dealership deliveries. But while they managed to stay positive,
Tata Motors
, which had made a remarkable comeback over the last few years, witnessed an 8% decline in dealer deliveries. Mahindra and Toyota, however, had good dispatches, but perhaps more due to pending consumer delivery backlog.
Shailesh Chandra, MD of Tata Motors’ passenger vehicles and electric mobility divisions, said after a boost in demand in the first half of April due to festivities in some parts of country, the industry has seen a decline in retails (registrations) in May and June due to elections and heatwave.
This has seen the company “re-adjust” wholesales to keep channel inventory under control. “The
electric vehicles
industry was affected by the broader industry trend and the impact of significant preponement of fleet sales in Q4FY24, due to expiry of FAME II subsidy in March 2024. Consequently, while the personal segment retails have grown slightly, there was a sharp decline witnessed in the fleet segment, which is expected to recover in the coming quarters,” he said.
Partho Banerjee, senior executive officer (marketing & sales) at Maruti, also said inventory levels are being monitored. “… we do feel that stocks are slightly higher as compared to the norm.” However, Banerjee said some ‘green shoots’ may begin to come up. “With the onset of monsoon and forecast of normal rains this year, we can expect more footfalls. Also, kharif sowing is going to be record high this year as per some reports. Thus, we are going to see the green shoots coming in the due course of time.”
Kunal Behl, VP (marketing & sales) at Honda Cars India, said, “Market conditions have been challenging to create fresh demand.”
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