 "Car Sales Plummet as Dealer Stock Soars Amidst Dwindling Demand Crisis")
In August 2024, domestic passenger vehicle sales in India fell by 2-3% year-on-year, totaling about 355,000 units. This decline is attributed to sluggish demand and high unsold inventory, with dealers holding around 730,000 cars, enough to last over two months. Maruti Suzuki, the leading carmaker, cut its dealer dispatches by around 13,000 units, leading to an 8.4% drop in its wholesales to 143,075 units. Hyundai also experienced an 8% decline, selling 49,525 units. As the festive season approaches, there’s hope for recovery, especially with popular SUVs making up a significant share of sales.
Car sales in India have taken a hit, with domestic passenger vehicle wholesales dropping by 2-3 percent year-on-year in August, totaling around 355,000 units. This decline is largely attributed to weak demand and manufacturers adjusting production to mitigate the growing unsold inventory held by dealers.
This marks the second consecutive month of falling sales, following a similar decline of 2.5 percent in July. Maruti Suzuki India, the largest carmaker in the country, reported a decrease in wholesales by 8.4 percent year-on-year, reaching 143,075 units. According to Partho Banerjee, Maruti’s senior executive, the company has reduced its dispatches to dealers by about 13,000 units in August. Dealer inventory at Maruti has been stable, with stock levels now covering about 36 days of sales.
With the festival season approaching, Banerjee noted that it’s crucial not to decrease dealer stock any further to avoid sidelining sales opportunities. He expects the industry-wide domestic wholesales for August to be around 350,000-355,000 units, slightly down from 361,000 units in the same month last year.
The current situation has prompted the Federation of Automobile Dealers Associations (FADA) to reach out to the Society of Indian Automobile Manufacturers (SIAM) regarding rising dealer stock, with some reports indicating that dealers are holding approximately 730,000 units, enough for over two months of sales.
In related news, Hyundai, India’s second-largest automaker, also saw a drop of 8 percent year-on-year in wholesales. Despite these challenges, the company remains optimistic about growth during the festive season, especially with the upcoming launch of its updated Alcazar SUV.
As the industry navigates through this slowdown, the preference for SUVs continues to rise, comprising a significant 54.9 percent of all passenger vehicle sales in August.
Overall, the Indian automotive Market is grappling with high inventory levels and sluggish demand, making it vital for manufacturers and dealers alike to strategize for the upcoming festive season.
Tags: Car Sales, India Automotive Market, Maruti Suzuki, Hyundai, Passenger Vehicle Wholesales, FADA, SIAM, Festive Season Sales
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Why did domestic car wholesales fall in August?
Domestic car wholesales fell in August due to high dealer stock and low demand from customers. -
What does high dealer stock mean?
High dealer stock means that car dealerships have a lot of unsold cars on their lots, which can lead to slower sales. -
Is low demand a big issue for car sales?
Yes, low demand is a big issue because it means fewer people are buying cars, which can hurt sales and profits for manufacturers. -
How much did wholesales decrease in August?
Wholesales decreased by 2 to 3 percent in August compared to previous months. - What could happen if the trend continues?
If the trend of high stock and low demand continues, car manufacturers might slow down production or offer more discounts to encourage sales.
