Auto Sales Decline in August Amid High Base and Lower Dispatches

Auto sales in India continued to decline in August for the second consecutive month, with passenger vehicle sales estimated to have fallen between 1.7% and 3%. This drop is attributed to a high base and reduced dispatches by carmakers to manage inventory levels at dealerships.

According to industry estimates, around 350,000 to 355,000 cars, sedans, and utility vehicles were dispatched from factories to dealerships last month, down from 361,123 vehicles sold in August 2023. Automakers in India generally report wholesale dispatches to dealers rather than retail sales to customers.

Maruti Suzuki, India's market leader, reported an 8.4% decline in sales to 143,075 units in August. Partho Banerjee, Senior Executive Officer of Marketing and Sales at Maruti Suzuki stated, "We calibrated our dispatches with market demand to bring down stocks at dealerships." The company's inventory in the channel has now been reduced to 36 days, compared to 38 days previously.

Other automakers also reported declines in sales. Hyundai Motor India saw an 8% drop in sales to 49,525 units, while Tata Motors experienced a 3% decrease, selling 44,142 units in August. Hyundai's Chief Operating Officer, Tarun Garg, highlighted that SUVs, such as Creta and Exter, remain a key growth driver, contributing 66.8% to domestic sales. The company is set to launch new 6- and 7-seater SUVs, which are expected to drive demand during the festive season.

Toyota Kirloskar Motor and Kia Motors India, however, bucked the trend, recording significant growth in August. Toyota's sales rose by 36.5% to 28,589 units, driven by demand for its utility vehicles, while Kia Motors India reported a 17.2% increase, selling 22,523 units. MG Motor India also posted growth, with sales up by 9% to 4,571 units, more than a third of which came from electric vehicles (EVs).

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Carmakers remain optimistic about a recovery in demand during the upcoming festive season, with Ganesh Chaturthi in Maharashtra and Onam in Kerala expected to boost sales. "Our bookings have gone up by 7% in Kerala, and we anticipate a strong retail performance during the Onam festival in September," Banerjee added.

Despite the recent slowdown, the overall sentiment in the auto industry remains positive, with companies gearing up for new launches and preparing for increased consumer interest as the festive season approaches.

[Disclaimer: This content is for informational purposes only and does not constitute financial or investment advice. Readers are encouraged to conduct their own research or consult with a professional advisor.]