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Mixed Sales Trends Hit Indian Auto Sector In July 2024
In July 2024, the combined wholesale dispatches of seven major passenger vehicle manufacturers in India saw a 1% decline compared to the previous year. Companies like Maruti Suzuki, Hyundai, Tata Motors, and Honda experienced reductions.
This decrease is attributed to efforts to manage high inventory levels before the festival season. Despite this, the Indian passenger vehicle industry surpassed the million-units mark in the first quarter of FY2024 but started the second quarter slower.
Maruti Suzuki, a leading player in the market, reported a 10% drop in sales for July 2024. However, strong demand for its SUVs and MPVs helped cushion the impact. Hyundai Motor India also faced a 3% decline in dispatches during July, with SUVs contributing significantly to its sales.
Tata Motors experienced a similar 3% drop in passenger vehicle dispatches, largely due to a 21% decline in EV wholesales. Despite this setback, Tata Motors remains a leader in the EV market but faces growing competition from other EV manufacturers.
Mahindra & Mahindra's Strong Performance
Contrarily, Mahindra & Mahindra (M&M) reported a robust 15% increase in domestic market wholesales for July. The company's diverse SUV portfolio has positioned it well to meet rising demand.
Over the first four months of FY2025, M&M's sales surged by 22% compared to the previous year. In July alone, M&M dispatched 29,533 units—a notable 44% increase from last year—and recorded a 36% YoY growth with 97,874 units sold from April to July 2024.
Mahindra & Mahindra plans to ramp up production capacity to meet strong SUV demand. The company aims to produce 64,000 units annually by FY2025 and reach 72,000 units per month by late 2026. This strategic move is expected to help M&M maintain its competitive edge in the burgeoning SUV market.
Toyota Kirloskar Motor's Impressive Growth
Toyota Kirloskar Motor (TKM) also posted impressive numbers with a 36% YoY increase in dispatches for July 2024, totalling 29,533 units—their best monthly performance of the year.
For the first four months of FY2025, TKM achieved cumulative dispatches of 97,874 units—a significant 36% YoY rise. TKM attributed this success to strong demand for SUVs and MPVs alongside improved supply chain and operational efficiencies.
Honda Cars India faced challenges with a 5% YoY decline in dispatches for July 2024, amounting to 4,624 units. From April to July 2024, their sales dropped by 7%, totalling 18,601 units. However, Honda has seen some recovery thanks to its Elevate midsize SUV which has helped regain some market share within the SUV segment.
Industry Challenges and Future Prospects
The Indian passenger vehicle industry is grappling with high inventory levels and declining sales figures. Nonetheless, companies like Mahindra & Mahindra continue to perform well amidst these challenges. The industry is optimistic about an uptick in demand during the upcoming festive season which includes Raksha Bandhan, Janmashtami, Onam, Ganesh Chaturthi, Dussehra and Diwali.
In June 2024, retail sales of passenger vehicles saw significant declines leading to record-high inventory levels across the industry. The reduced dispatches observed in July reflect strategic inventory control measures taken by manufacturers ahead of anticipated festive season demand spikes.
The industry hopes that festivals will drive strong demand for various vehicle segments including SUVs and MPVs. Manufacturers are preparing for increased consumer interest during these celebrations which are crucial periods for boosting annual sales figures.
The Indian passenger vehicle sector continues to face hurdles due to elevated inventory levels and reduced sales rates. However certain companies like Mahindra & Mahindra remain resilient showing positive growth trends amidst these challenges.
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