Passenger vehicle sales drop 2.5% in July: SIAM

Wholesale sales of passenger vehicles (PV) declined by 2.5% to 3,41,510 units in July 2024, compared to 3,50,355 units in July 2023, according to the latest data released by SIAM. This decline occurred as original equipment manufacturers (OEMs) adjusted their shipments to dealers due to high unsold inventory at retail outlets.

In contrast, sales of three-wheelers increased by 5.1% to 59,073 units in July 2024, up from 56,204 units in July 2023, while two-wheeler sales rose by 12.5% to 14,41,694 units in July 2024, up from 12,82,054 units in July 2023.

Director General of SIAM, Rajesh Menon noted that three-wheeler sales are nearing the peak levels of 2018-19. “Three Wheelers posted a growth of 5.1% compared to July last year, with sales of 0.59 Lakh units in July 2024, which is close to the peak of 2018-19. Two- Wheeler segment also posted a decent growth of 12.5% in July 2024 as compared to July 2023, with sales of 14.42 Lakh units,” says Menon.

Highlighting the strong performance of the three-wheeler and two-wheeler segments, Vinod Aggarwal, president at SIAM, said, “Though Three-Wheeler and Two-Wheeler segments are performing well, there has been some de- growth of Passenger Vehicles and Commercial Vehicles in July 2024, compared to July 2023. The above average rainfall coupled with the upcoming festive season is likely to again propel growth in the short term."

"In addition, enabling budget announcements which emphasises on overall economic growth with fiscal support for infrastructure and rural sector should augur well for the Auto sector in the medium term," Aggarwal adds.

Last week, the Federation of Automobile Dealers Associations (FADA) reported that PVs’ inventory levels have soared to a historic high of 67-72 days, amounting to ₹73,000 crore in unsold stock.

FADA anticipated that, in the near term, two-wheeler sales would benefit from a growing rural economy, favourable monsoon conditions, and the introduction of new products. The festive season and positive agricultural conditions were also expected to drive sales. However, heavy rainfall, ongoing agricultural activities, and erratic monsoon patterns could have dampened demand in some regions.

The auto dealers' lobby noted that passenger vehicles had experienced mixed outcomes. While the festive season, appealing promotions, and favourable monsoon conditions were expected to boost sales, concerns about low consumer sentiment, heavy rainfall, and a lack of new product launches persisted. They also highlighted that high inventory levels posed a significant risk and stressed the importance for PV OEMs to have avoided further increases in stock to prevent financial strain on dealers.