Automobile sales declines 7.01 pc in August, above normal monsoon attributed to poor performance: FADA

Federation of Automobile Dealers Association on Thursday released the retail details for the month of August. The total growth of the industry was just 2.88 per cent YoY, with varying performance across segments.

The total number of automobile sales in the country for the month of August was 18,91,499, a down from 20,34,116 in July. This accounts to a massive decline of 7.01 per cent MoM.



Two wheeler sales grew 6.28 per cent YoY, despite a 7.29 per cent MoM decline, which was due to rain disruptions and market saturation, said the release by FADA. While Passenger Vehicles (PV) sales Declined by 4.53 per cent YoY and 3.46 per cent MoM. Overall PV registrations last month stood at 3,09,053 units, as compared to 3,23,720 units in August 2023. Commercial Vehicles (CV) saw a sharp drop with an 8.5 per cent MoM and 6.05 per cent YoY decline. The poor performance was attributed to weather-related disruptions and weak industrial demand.

The three wheeler segment saw a decline of 4.54 per cent MoM but saw an nominal increase of 1.63 per cent YoY.

The key reason for the decline has been primarily because of 15.9 per cent excess rainfall in key regions.

FADA President, Manish Raj Singhania said, “In August, India witnessed 15.9 per cent excess rainfall across the country, with northwest India seeing a surplus of 31.4 per cent, 7.2 per cent in the east and northeast, 17.2 per cent in central India and a minor deficiency of 1.3 per cent in the peninsular region. This monsoon season brought unpredictable weather, starting with extreme heat waves which delayed monsoon and transitioned into heavy rainfall, leading to flood-like conditions in several areas."

Singhania also warned of increasing inventory. "Even with the arrival of the festive season, the market remains under significant strain... Inventory levels have reached alarming levels, with stock days now stretching to 70-75 days and inventory totalling 7.8 lakh vehicles, valued at an alarming Rs 77,800 crore," he said.


He said that the industry grappled due to volatile conditions.

"These weather anomalies have had a direct impact on India's auto retail market, which registered a modest YoY growth of just 2.88 per cent in August. While the two-wheeler (2W) and three-wheeler (3W) segments managed to post growth at 6.28 per cent and 1.63 per cent, respectively, other categories faced significant setbacks. Passenger vehicle (PV) sales declined by 4.53 per cent, tractor sales dropped by 11.39 per cent and commercial vehicles (CV) saw a 6.05 per cent drop, underscoring the challenges the industry is grappling with, due to these volatile conditions. The 2W market saw a MoM decline of 7.29 per cent, largely due to excessive rains and flooding, which disrupted demand across various regions" added Singhania.