Sluggish Demand in India Hits Auto Retail Sales Amid Festive Season

Automobile retail sales in India saw a 9% decline in September. The Federation of Automobile Dealers Associations (FADA) reports high inventory levels due to flat market growth, urging OEMs for corrective action. Seasonal factors like Shraddh and rainfall have exacerbated the financial strain on dealers.

In a concerning trend for India's automobile sector, retail sales saw a significant decline of 9% in September, according to new data from the Federation of Automobile Dealers Associations (FADA). The slowdown, attributed to sluggish consumer demand, has led to an alarming buildup of inventory among dealers.

Despite key festivals like Ganesh Chaturthi and Onam, the market performance remained stagnant, prompting FADA to call upon original equipment manufacturers (OEMs) for urgent corrective measures. The drop in sales spans multiple categories, with passenger vehicles and two-wheelers facing year-on-year declines.

FADA President C S Vigneshwar pointed to seasonal factors such as the Shraddh period, heavy rainfall, and a sluggish economy further intensifying the situation, leaving dealers with unsold stocks worth billions. The association is also seeking intervention from the Reserve Bank of India for stricter channel funding policies to alleviate financial pressures on dealers.

(With inputs from agencies.)