Passenger vehicles (PV) sales growth during June was 3% better than the same month last year as the industry struggled with high inventory forcing companies to bring down production.
The PV segment, which comprises cars, utility vehicles and vans, saw sales of 337,757 units in June, as per data shared by the Society of Indian Automobile Manufacturers (SIAM).
Growth of PV production in June at just 0.8% year-on-year (y-o-y) was the lowest in a month in recent years. The data does not include Tata Motors, SIAM clarified. Retail demand during the reporting month was hit by hot weather conditions in most parts of the country and poor rainfall.
Though there is unsold inventory of more than 600,000 in the channel, according to PV dealers. Speaking to reporters in Delhi Vinod Aggarwal, president, SIAM said, “As a whole we don’t see inventory as a concern.”
“It is a regular phenomenon that keeps happening on and off as OEMs (original equipment makers) do produce more in certain months. We believe that all OEMs will take responsible actions if dealers are struggling with excessive inventory,” Aggrawal added.
The steep inventory build-up which the dealers say has hit the all time high of 67 days, has forced OEMs to cut prices in order to stimulate retail demand. Tata Motors and Mahindra & Mahindra slashed prices of their SUVs by as much as Rs 2 lakh this week for a limited period.
During the April-June quarter the PV segment grew by 3% which was in line with the prediction made by companies like Tata Motors and Maruti Suzuki for FY25. This prediction takes into account the high base of last year and subdued sentiments during the first half of the year.
The two-wheeler segment, riding high on rural demand, saw a growth of 21% y-o-y in volumes to 1.61 million units in June. The three-wheeler segment was up 12% y-o-y to 59,544 units during the same month.
“With positive outlook on the monsoon and coming festive season, the automotive sector is poised to perform better in the balance part of the year,” Aggrawal added.
