Domestic passenger vehicle sales decline amid high dealer inventory

4 min read Last Updated : Aug 01 2024 | 7:40 PM IST

Domestic passenger vehicle (PV) wholesales for the top carmakers Maruti Suzuki India (MSIL), Tata Motors, Hyundai Motor India (HMIL), Mahindra and Mahindra (M&M), and Toyota Kirloskar Motors (TKM) have declined by a modest 1.6 per cent year-on-year (Y-o-Y) to 304,381 units in July as carmakers had to rationalise dispatches amidst high dealer inventories.

Sales of TKM and M&M are, however, up by 42.25 per cent and 15 per cent respectively, while MSIL, Tata Motors, and HMIL are down by 9.6 per cent, 6 per cent, and 3.3 per cent respectively.

Ratings agency ICRA said in a note in July that inventory holding at PV dealerships increased to 62-67 days (against an average of 30-35 days) as of June 2024, as per the Federation of Automobile Dealers Association (FADA), because of steady production and a slowdown in retail sales as extreme heat and the Lok Sabha elections impacted retail footfalls.

“Inventory levels are expected to remain at an elevated level in the near term, impacting dealerships’ margins,” it added.

The country’s largest PV player, MSIL, saw its wholesales fall to 137,463 units (down 9.67 per cent) as its UV segment sales fell from 62,049 units in July 2023 to 56,302 units in July 2024, and sales of its mid-sized sedan Ciaz fell sharply from 1,348 units last July to 603 units this year. The Mini segment cars (Alto and S-Presso) remained resilient at 9,960 units while Compact segment cars (Baleno, Celerio, Dzire, Ignis, Swift, and WagonR) fell by 12.5 per cent.

Tata Motors sold 44,725 units in July, including electric vehicles (EVs), as demand for fleet cars fell with the discontinuation of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme.

Tata Motors Group Chief Financial Officer PB Balaji said at the media call post results on Thursday that some degree of slowdown was evident in both internal combustion engine (ICE) and EV segments.

Elevated inventory levels at PV dealerships led to a sharp increase in discounts in FY2024. “While discounts were higher on slow-moving models, the OEMs and dealerships have now started offering discounts on a few high-demand models as well to ensure a stronger booking pipeline,” ICRA said.

Domestic PV sales of HMIL decreased by 3.33 per cent Y-o-Y to 49,013 units in July. SUVs accounted for 66.6 per cent of HMIL domestic sales in calendar year 2024, with the new Hyundai Creta achieving sales of 100,000 units till July 2024 since its launch in January 2024.

M&M’s overall PV sales marked an increase of 15 per cent Y-o-Y as they stood at 41,623 units for July this year as opposed to 36,205 units last year.

Speaking on the rise for Mahindra, Nalinikanth Gollagunta, CEO – Automotive Division, Mahindra & Mahindra stated “ With the increased preference for SUVs, we continue to be the trusted SUV brand of choice for many car buyers. The recent successful launch of XUV3XO coupled with targeted portfolio interventions on XUV700, SCORPIO-N has made the portfolio even more appealing as borne out in this month’s sales numbers. M&M has a compelling portfolio of authentic & sophisticated SUVs crafted with deep passion and strong legacy.”

Marking their highest-ever monthly sales, Toyota’s domestic sales stood at 29,533 units, marking a 42.25 per cent increase Y-o-Y for July compared to July 2023, where 20,802 units were sold.

“Demand for all our models remains at an all-time high, especially in the SUV (Sport Utility Vehicle) and MPV (Multi-Purpose Vehicle) segments. Our formidable presence in these categories offers robust choices to customers,” stated Sabari Manohar, Vice President, Toyota Kirloskar Motor.

Two-wheeler sales grow in double digits:

Two-wheeler players, however, continued their strong run posting double-digit sales growth. Among major players, Honda Motorcycle & Scooter India (HMSI) domestic sales stood at 439,118 units, marking a 41 per cent Y-o-Y growth. This was attributed to network expansion and hitting sales milestones in South India.

Bajaj Auto, another leading player, experienced a 19 per cent increase, selling 168,847 units compared to 141,990 units sold last year.

TVS Motor Company’s domestic two-wheeler sales registered a growth of 8 per cent, with sales increasing from 235,230 units in July 2023 to 254,250 units in July 2024.

Two-wheeler sales have revived as rural sentiments are favourable with good monsoons.

First Published: Aug 01 2024 | 7:31 PM IST