Fada: September auto retails down 9.26% on heavy rainfall, weak sentiments

While the passenger vehicle retails have been on a decline for some months now, this is the first monthly sales drop at an aggregate level (across the segments) since the start of this fiscal, indicating a broad-based slowdown in the world’s largest two and three-wheeler market and third-largest car market.

Despite steep discounts and attractive consumer offers, car retail sales fell nearly 19% year on year last month. Passenger vehicle (PV) dealers are facing all-time high inventory levels of 80-85 days, equivalent to 790,000 vehicles worth about ₹79,000 crore, due to aggressive dispatches by automakers, Fada said in a statement.

C S Vigneshwar, president of Fada, said seasonal factors such as the 16-day Shraddh or Pitru Paksha in the second half of September, coupled with heavy rainfall and a sluggish economy, exacerbated the situation, leaving dealers with historically high inventory levels.The steep decline in PV sales is “signalling an alarming trend of declining consumer demand and deteriorating market sentiment,” he said.

With the first leg of the festive season that began with Ganesh Chaturthi and Onam failing to ignite demand, automakers and their dealers are now pinning hopes of revival during the ongoing Navratri festival and Diwali.

Two-wheelers and truck sales also dropped 8% and 10%, respectively, year on year in September.

While low consumer sentiment, poor inquiries and reduced walk-ins dented two-wheeler sales, CV sales saw marginal growth in regions supported by infrastructure projects, Fada said.

The overall demand remained weak due to low government spending, extended monsoon delays and seasonal challenges, it said.

Despite some improvement in fleet purchases, the market conditions remain subdued.

Three-wheeler sales in September showed marginal growth of 0.99% month on month and 0.66% year on year, driven by positive customer engagement, and increasing demand for e-rickshaw options.

But the overall demand remained subdued as many customers deferred purchases in anticipation of the festive season as heavy rains impacted walk-ins and sales activity.

The overall volumes are being led by urban India that has grown marginally by 0.14% year on year in September. Rural India saw the overall demand fall 0.13% during the same period, the dealer body said. A total of 11,915,963 vehicles (all categories) were retailed in the first half of FY25, up 6.55% year on year, it said.