Car Sales in Sep: Top OEMs cut dealer dispatches, lay hope on retail traction in Oct

New Delhi: Passenger vehicle dispatches to the dealers dropped for the third consecutive month during September 2024. Industry estimates suggest OEMs dispatched about 3.55 lakh to 3.60 lakh units last month, down from 3.64 lakh units in September last year.

This also marks the third straight month of top OEMs, including Maruti Suzuki, Hyundai and Tata Motors, cutting down on dispatches to their dealers. It may be noted that this is despite high discounts on most models during the last few months, thereby signaling a muted consumer sentiment.

“For the last three months, we are calibrating our dispatches to the dealer, and focusing on the Vahan market share. Every month we are taking a very considerable call to transfer the stocks from the factory to the dealers,” Partho Banerjee, Senior Executive Officer- Marketing and Sales, Maruti Suzuki India, said.

He said that the company’s inventory in the channel has come down from 36-37 days last month to about 30 days now.

Meanwhile, OEMs like Mahindra & Mahindra (M&M), Toyota Kirloskar and Kia India marked a growth in monthly dispatches to the dealers. This may be attributed to a combination of high demand for SUV models in the portfolio, and introduction of new models in the market.

Interestingly, as the adjustment of stocks happened for Tata Motors, Mahindra moved ahead by about 10,000 units to become the third largest passenger vehicle maker in the market during September 2024.

Retail sales momentum

Retail sales (Vahan registrations) during September also reported a year-on-year drop. Banerjee pointed out that this was largely owing to the Shraddh period, which took up most part of September (Sep 17- Oct 2). In major parts of the country, Shraddh is considered as an inauspicious period for buying big ticket items like cars.

Tata Motors, which also reported a decline in dispatches, noted that the PV industry in Q2 FY25 saw more than 5% decline in retails compared to Q2 FY24. This was driven by slow consumer demand and seasonal factors.

Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility said that the industry’s offtake was significantly higher than registrations in anticipation of a strong start to the festive season, resulting in a continued buildup of channel stock.

The Nexon maker “readjusted wholesales to lower-than-expected retails, to keep channel inventory under control.”

Electric Vehicle (EV) sales in the personal segment was affected by the lapse of registration and road tax waivers in key states. Fleet EV sales continued to remain impacted due to lapse of FAME-II and non-inclusion of the fleet segment in the PM-eDRIVE scheme, Chandra said.

Festive season

October this year is marked by major festivities including Navratri, Dussehra and Diwali, which drive the consumer consumption levels.

Going forward, Maruti Suzuki said it remains hopeful of a good retail traction during October owing to a positive demand from rural areas, good monsoon, and crop harvest.

Talking about the festive season this year, Banerjee said, “It is not going to be negative at all. Maybe we will see a growth which is going to happen.”

For full year, he noted that the industry is expected to clock a single-digit growth due to a lack of pent-up demand and the high base of last year.

Tarun Garg, Chief Operating Officer, Hyundai Motor India said the company's dealer touchpoints are "fully geared up to delight customers with deliveries" during this auspicious period.

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