Auto sales declined by 9.26% YoY in September 2024: FADA

Decline in auto sales: The automobile industry in India witnessed a decline in sales in September 2024. The overall automobile sector saw a mixed performance across various segments. According to FADA, the auto industry witnessed a decline of 9.26 per cent on a year-on-year basis in September 2024. The major factors for the decline in sales during this period were weak consumer sentiment and high inventory levels with the dealers, which resulted in low sales in the passenger vehicle and the two-wheeler segments.

FADA President, Mr. C S Vigneshwar, stated, “The 2024 southwest monsoon recorded 8 per cent above-normal rainfall—the highest in four years—which has boosted Kharif sowing by 1.5 per cent YoY. This increase in agricultural productivity has positively impacted rural demand and economic sentiment.

Factors for low sales:

The Federation of Automotive Dealers (FADA) cited heavy rains and weak consumer sentiment as the major factors for the low demand for passenger vehicles and two-wheelers. The organisation, in its report, also said that Ganesh Chaturthi and Onam also failed to ignite demand for vehicles in the country in September this year.

The regulatory body also said that the period of Shraddh negatively impacted the sales of vehicles, resulting in a decline in various categories on a year-on-year basis.

Two-wheeler sales declined:

The retail sales of the two-wheeler segment witnessed a decline of 8.51 per cent on a year-on-year basis, attributed to delayed purchases due to heavy rains, seasonal factors like Shraddh, weak consumer sentiment, and low inquiries.

Passenger Vehicle sales slumped:

The data released by FADA highlighted that the retail sales of the passenger vehicle segment also slumped and recorded a steep decline of 18.81 per cent on a year-on-year basis. “In the PV category, sales plummeted by 10.8 per cent month-on-month and 18.81 per cent year-on-year, signalling an alarming trend of declining consumer demand and deteriorating market sentiment,” the release said.

Commercial Vehicle sales surged marginally:

The commercial vehicle segment witnessed a marginal growth of 1.46 per cent on a month-on-month basis but saw a decline of 10.45 per cent on a year-on-year basis, showing a mixed performance. This pattern showcased subdued market conditions and weaker government spending. The release stated that, “ While there was positive sentiment and marginal growth in regions supported by infrastructure projects, overall demand remained weak due to low government spending, extended monsoon delays, and seasonal challenges. ”

Tractors and three-wheeler sales surged:

The tractor segment and the three-wheeler segment sales saw a surge in demand. According to the data, there was a growth of 14.69 per cent on a year-on-year basis in the tractor segment and the three-wheeler segment witnessed a marginal growth of 0.66 per cent on a year-on-year basis. “The 3W sales showed marginal growth of 0.99 per cent MoM and 0.66 per cent YoY, driven by positive customer engagement and increasing demand for e-rickshaw options,” the release stated.