Car Sales Drop in August 2024, But Festive Season Brings Hope
In August 2024, the domestic passenger vehicle industry in India saw a slight decline in sales compared to August 2023. This was due to weak retail demand and high inventory levels at dealerships, according to Kotak Institutional Equities.
Reasons for Decline
The report highlighted that uneven rainfall in northern and eastern regions affected tractor sales. However, it is expected that improved monsoon conditions and the upcoming festive season will boost sales in the coming months.
Performance of Major Companies
Maruti Suzuki India Limited (MSIL), the largest player in the segment, reported a 4% year-on-year (YoY) drop in total volumes, including a 5% decline in domestic sales. Tata Motors saw a 3% YoY decrease, and Hyundai Motors reported an 8% drop. On the other hand, Mahindra & Mahindra (M&M) and Toyota India saw significant growth, with 16% and 37% YoY increases, respectively.
Two-Wheeler Segment
The two-wheeler segment showed resilience with high single-digit YoY growth in domestic wholesale volumes. Electric two-wheeler sales surged by 41% YoY, driven by new launches and attractive discounts. Hero MotoCorp (HMCL) saw a 5% YoY rise, TVS Motor reported a 14% increase, and Bajaj Auto’s volumes grew by 18% YoY. However, Royal Enfield faced a 5% YoY decline.
Commercial Vehicles and Tractors
The Commercial Vehicle (CV) segment underperformed, with domestic volumes declining by low double digits YoY. Tata Motors experienced a 15% YoY drop in domestic CV volumes, while Ashok Leyland reported a 7% decline. The domestic tractor segment remained flat YoY, with M&M’s tractor volumes growing by 1% and Escort Kubota’s volumes remaining unchanged.
The report suggests that strong festive demand could help offset some of the losses experienced in the first half of the fiscal year, especially if economic conditions and consumer sentiment improve.
Doubts Revealed
Maruti Suzuki -: Maruti Suzuki is a popular car company in India. They make and sell many types of cars.
Tata Motors -: Tata Motors is another big car company in India. They make cars, trucks, and buses.
Hyundai Motors -: Hyundai Motors is a car company from South Korea that sells many cars in India.
Mahindra & Mahindra -: Mahindra & Mahindra is an Indian company that makes cars, tractors, and other vehicles.
Toyota India -: Toyota India is the Indian branch of Toyota, a big car company from Japan.
Electric two-wheeler -: Electric two-wheelers are bikes or scooters that run on electricity instead of petrol.
Commercial Vehicle -: Commercial vehicles are big vehicles like trucks and buses used for transporting goods or people.
Tractor segment -: The tractor segment refers to the market for tractors, which are used in farming.
Festive season -: The festive season in India includes festivals like Diwali and Dussehra, when people often buy new things.
