As we step into September 2024, car and two-wheeler manufacturers have reported their sales numbers for August 2024, revealing a mixed trend in the Indian auto market. While some manufacturers showed growth in their sales figures, others witnessed declines, largely due to rising inventory levels at dealerships across all Original Equipment Manufacturers (OEMs) in the country. According to the Federation of Automobile Dealers Associations (FADA), passenger vehicle inventories have reached an all-time high, creating a challenging environment for the auto industry. However, OEMs remain hopeful for a revival in sales with the onset of the festive season starting in September.

Let’s delve into the sales data of various carmakers and two-wheeler manufacturers to understand the current market dynamics and what the future might hold.

Maruti Suzuki Reports Robust Domestic Sales Growth

Maruti Suzuki India Limited, the country’s largest carmaker, reported total sales of 181,782 units in August 2024. This figure includes domestic sales of 145,570 units, sales to other OEMs of 10,209 units, and exports of 26,003 units. The domestic sales volume witnessed a strong performance, with 145,570 units sold in August 2024.

• Small Car Segment: Models like Alto, S-Presso, Baleno, Celerio, Dzire, Ignis, Swift, and WagonR achieved a combined sales volume of 68,699 units.
• Utility Vehicle Segment: The utility vehicle segment, which includes popular models such as Brezza, Grand Vitara, Fronx, Ertiga, XL6, and Jimny, registered a total sales volume of 62,684 units.

Maruti’s performance in August is encouraging despite the industry’s overall struggle with high inventories. The carmaker’s focus on a balanced portfolio across small cars and utility vehicles seems to have paid off, driving significant domestic sales.

Kia Motors Achieves Impressive YoY Growth

Kia Motors reported a notable growth in sales for August 2024, with a 17.19% year-on-year (YoY) increase. The company sold 22,523 units in the domestic market, compared to 19,219 units in the same period last year.

• Best-Selling Models: The Sonet emerged as the highest-selling model for Kia in August, recording a volume of 10,073 units. It was followed by the Seltos with 6,536 units, while Carens contributed 5,881 units. Kia also sold 33 units of the fully-imported EV6 model.

Kia’s growth trajectory is driven by the continued demand for its compact SUV Sonet and mid-size SUV Seltos. The company’s strategy to maintain a diversified product lineup, including electric vehicles (EVs) like the EV6, has helped it stay competitive in the evolving auto market.

Toyota Kirloskar Records Strong Growth

Toyota Kirloskar Motor (TKM) reported a significant 35% YoY growth in sales for August 2024. The company sold a total of 30,879 units in August 2024, compared to 22,910 units in August 2023.

• Domestic Sales: Total domestic sales stood at 28,589 units.
• Exports: Toyota exported 2,290 units during the same period.

The company also reported a 45% growth in sales for the first eight months of CY 2024, reflecting robust demand for its SUVs and MPVs. Toyota reopened bookings for the Innova Hycross ZX & ZX (O) models in August, which are available in self-charging strong hybrid electric vehicle (SHEV) and gasoline variants. This move, along with a streamlined production process, has helped Toyota to cater to the increased demand in anticipation of the festive season.

Tata Motors Reports a Decline in Sales

Tata Motors, a major player in the Indian automotive market, reported a decline in sales for August 2024. The company’s total domestic sales stood at 70,006 units, down 8% from 76,261 units in August 2023.

• Passenger Vehicle Segment: The domestic passenger vehicle segment recorded 44,486 units, a 3% YoY decline compared to 45,513 units in August 2023.
• Electric Vehicles (EVs): Tata sold 5,935 units of electric cars in August 2024, down 5% from 6,236 units in the same period last year.
• Exports: Tata Motors exported only 344 units, reflecting an 18% decline from the previous year.

The dip in Tata Motors’ sales can be attributed to the high inventory levels and lower-than-expected demand from consumers. However, the company remains optimistic about a turnaround with the upcoming festive season, which typically sees a surge in car sales in India.

TVS Motor Company Shows Positive Growth

TVS Motor Company reported a positive sales performance in August 2024. The total two-wheeler sales for the month stood at 378,841 units, reflecting a 14% YoY growth compared to 332,110 units sold in August 2023.

• Domestic Two-Wheeler Sales: Recorded a YoY growth of 13% with sales increasing from 256,619 units in August 2023 to 289,073 units in August 2024.
• Motorcycles and Scooters: Motorcycle sales grew by 11%, from 153,047 units last year to 170,486 units in August 2024. Scooter sales saw a 15% growth, rising from 142,502 units in August 2023 to 163,629 units in August 2024.
• Electric Vehicles (EVs): TVS EV sales grew by 4%, from 23,887 units in August 2023 to 24,779 units in August 2024.
• Exports: Total export sales increased by 14%, from 87,515 units in August 2023 to 99,976 units in August 2024, while two-wheeler exports saw a 19% growth.

TVS’s growth across various segments, including scooters, motorcycles, and EVs, highlights the company’s diversified portfolio and its ability to cater to different customer needs. The increase in exports also suggests that TVS is successfully expanding its footprint in international markets.

Challenges in the Auto Industry: Rising Inventory Levels

While some manufacturers have posted growth in sales, the overall auto industry in India faces challenges due to rising inventory levels. The inventory of passenger vehicles in India is estimated to be worth ₹73,000 crore, with inventory levels reaching a record high of 67-72 days. This situation has led to a slowdown in sales as dealers struggle to clear existing stocks.

In July 2024, passenger vehicle sales in India declined by 2.5% YoY to 3,41,510 units, indicating that high inventory levels and lower-than-expected consumer demand have impacted the market. To address this, companies have reduced their sales to manage high inventory levels with dealers.

Industry Outlook: Anticipating a Revival in the Festive Season

Despite the current challenges, OEMs are hopeful for a revival in the auto industry starting from September, coinciding with the onset of the festive season in India. Historically, the festive season, which includes holidays such as Diwali and Dussehra, has been a period of increased consumer spending, particularly in the automobile sector.

Major PV OEMs like Maruti Suzuki, Hyundai, Tata Motors, and Mahindra, along with two-wheeler companies like Royal Enfield and Bajaj, are expected to ramp up their marketing efforts, introduce festive discounts, and launch new models to attract buyers. Additionally, the easing of interest rates and favorable financing options from banks and NBFCs are expected to boost consumer confidence and drive demand.

Conclusion: Mixed Performance Amid Optimism for the Future

The sales numbers for August 2024 indicate a mixed performance for the Indian auto industry. While some manufacturers like Maruti Suzuki, Kia, and Toyota have reported growth in sales, others like Tata Motors have faced declines. The high inventory levels at dealerships remain a significant concern, impacting sales and creating a challenging environment for the industry.

However, the upcoming festive season offers a glimmer of hope for carmakers and two-wheeler manufacturers. With strategic promotions, new launches, and improved financing options, OEMs are gearing up for a potential revival in demand. As the industry navigates these uncertain times, all eyes will be on the sales performance in the coming months to gauge the true impact of these efforts and the overall market sentiment.

 

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