Passenger vehicle sales in June dropped to 2,81,566 units, the lowest since September 2022, according to data from the Federation of Automobile Dealers Association
Retail sales of cars in India fell by 6.8 per cent in June, marking its worst decline in almost two and half years, a dealers’ body said as reported by Reuters, as heatwaves across the country kept customers from visiting showrooms.
Passenger vehicle sales in June dropped to 2,81,566 units, the lowest since September 2022, according to data from the Federation of Automobile Dealers Association (FADA), which tracks monthly retail sales from dealers to buyers.
Auto sales are seen as a key indicator of private consumption in the country. India’s auto industry forms 7 per cent of the country’s GDP, as per government data.
The intense heat in India has reduced footfall at dealerships by 15 per cent, leading to fewer people buying cars, according to FADA.
Weak retail sales of cars result in higher inventory costs that hurt dealers’ financials. In June, dealers had an inventory buildup of 62-67 days, FADA said. The recommended level is three weeks.
Still, the SUV portfolios of companies, including that of Maruti Suzuki, benefitted from strong demand, extending record-high sales seen in the financial year 2024.
SUV maker Mahindra & Mahindra’s, shares fell as much as 2.2 per cent on the day, before trimming some losses. Larger rivals Maruti Suzuki and Tata Motors each fell as much as 0.6 per cent.
Reuters quoted Manish Raj Singhania, President, FADA as saying, “Dealer feedback highlights challenges such as low customer enquiries and postponed purchase decisions.”
