Auto Industry Faces Slump as Domestic Passenger Vehicle Sales Decline

The domestic passenger vehicle industry experienced a minor decline in August 2024 due to weak demand and high inventory levels, per Kotak Institutional Equities. However, improvement is expected with upcoming monsoon and festive season. Key players like Maruti Suzuki and Tata Motors reported declines, but Mahindra & Mahindra bucked the trend.

The domestic passenger vehicle industry volumes experienced a low single-digit decline in August 2024 compared to August 2023, as a result of weak retail demand trends and high inventory levels at dealerships, according to a report by Kotak Institutional Equities.

The report indicates that low sales for tractors were driven by uneven rainfall distribution in northern and eastern regions. However, the outlook is not entirely bleak, as improved monsoon conditions and the upcoming festive season are expected to boost growth.

Key players saw mixed results. Maruti Suzuki reported a 4% YoY drop in total volumes, while Tata Motors and Hyundai Motors faced declines of 3% and 8%, respectively. Conversely, Mahindra & Mahindra and Toyota India posted growth. The two-wheeler segment showed resilience with Hero MotoCorp and TVS Motor reporting gains, though Royal Enfield saw a decline. Commercial vehicles underperformed overall, with Tata Motors and Ashok Leyland reporting drops in domestic volumes.

(With inputs from agencies.)