Automobile Sales Fall by 7% in August: FADA Report The commercial vehicle (CV) segment had a tough month, with sales dropping 8.50 per cent MoM and 6.05 per cent YoY.
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The Indian automotive industry experienced a mix of trends in August 2024, as revealed by the latest vehicle retail data published by FADA (Federation of Automobile Dealers Associations). While some segments demonstrated robust year-on-year (YoY) growth, others struggled with negative month-on-month (MoM) declines. While two-wheelers and electric three-wheelers are growing steadily, traditional segments like commercial vehicles and tractors are facing challenges. Seasonal factors, inflationary pressures and fluctuating consumer demand are influencing short-term performance.
The two-wheeler (2W) segment, which constitutes the largest share of the market, registered impressive year-on-year (YoY) growth of 6.28 per cent in August 2024. Sales climbed to 13,38,237 units from 12,59,140 units the previous year. However, the segment experienced a 7.29 per cent month-on-month (MoM) decline compared to July 2024. This dip could be attributed to seasonal factors such as monsoon conditions, which often dampen two-wheeler sales in India.
The three-wheeler (3W) category displayed modest YoY growth of 1.63 per cent, with 1,05,478 units sold in August 2024 compared to 1,03,782 units in August 2023. This rise was driven by the increasing adoption of electric vehicles (EVs) in this segment.
Manish Raj Singhania, FADA President, commented, "FADA is raising SOS signals as PV sales fell by 3.46 per cent MoM and 4.53 per cent YoY. Even with the arrival of the festive season, the market remains under significant strain due to delayed customer purchases, poor consumer sentiment and persistent heavy rains. Inventory levels have reached alarming levels, with stock days now stretching to 70-75 days and inventory totalling 7.8 lakh vehicles, valued at an alarming INR 77,800 crore. Rather than responding to the situation, PV OEMs continue to increase dispatches to dealers on a MoM basis, further exacerbating the issue."
Passenger vehicles (PV) saw a sharp 3.46 per cent MoM decline in August 2024, with 3,09,053 units sold compared to 3,20,129 units in July 2024. The YoY comparison also showed a dip of 4.30 per cent from August 2023's 3,23,720 units. This decline may be attributed to high interest rates and inflationary pressures on consumer spending, along with the subdued demand post the festive season.
The commercial vehicle (CV) segment had a tough month, with sales dropping 8.50 per cent MoM and 6.05 per cent YoY. The segment reported 73,253 units sold in August 2024, down from 80,057 units in July 2024 and 77,967 units in August 2023. The sharpest decline was seen in the light commercial vehicles (LCV) and medium commercial vehicles (MCV) categories, with YoY drops of 6.10 per cent and 10.82 per cent, respectively. Factors like rising fuel prices and a slow revival of infrastructure projects may have contributed to this sluggish performance.
