Car Sales In India Fell In September As Makers Realigned Production

Carmakers in India have realigned production to a slowing demand but their dispatches to dealerships still outpaced actual sales on the showroom floor.

Car wholesales—or dispatches to dealerships from the factory floor—declined 1.6% year-on-year to 3,56,752 units in September 2024, even as retail sales—calculated as vehicle registrations on the government’s VAHAN website—fell 18.81% from the year-ago period to 2,75,681 units, according to the data released by Society of Indian Automobile Manufacturers and the Federation of Automobile Dealers Associations. 

That’s a gap of 81,071 units in one month alone.

That gap is significant, for it comes at a time when the world’s third largest automotive market is saddled with record-high inventory. 

As many as 7.9 lakh cars worth Rs 79,000 crore are languishing at dealerships—that’s equivalent to unsold stock of 80-85 days, according to FADA data. While retail sales are likely to see a significant bump-up in October—with Dussehra, Dhanteras and Diwali in the same month—the backlog is unlikely to be wiped out, industry watchers told NDTV Profit.

“Heavy rainfall in key states, and almost the entire ‘Shradh’ period falling in the month of September, did impact the sales numbers of some of the segments,” SIAM President Shailesh Chandra said in a statement on Monday. “With the rains easing and continued infrastructure spending, and the arrival of the festive season boosting consumption, we anticipate healthy demand in the next quarter.”

• Four wheeler sales down 1.4% YoY at 3,56,752 units.

• Three wheeler sales up 6.7% YoY at 79,683 units.

• Two wheeler sales up 15.8% YoY at 20,25,993 units.

FADA has urged automakers to take immediate corrective measures to avoid a financial setback. The dealers lobby has also called on the Reserve Bank of India to issue an advisory to banks, mandating stricter channel funding policy, based only on dealer consent and on actual collateral.

“This is the final opportunity for carmakers to recalibrate and support market recovery, before it’s too late,” FADA President CS Vigneshwar said on Oct. 7.