Indian Automakers Face Declining Sales in Q2 2024, Hopeful for Diwali Rebound

The Indian automotive industry has experienced a challenging period from July to September, particularly in terms of sales numbers for the previous quarter. Industry experts are referring to this as a period of decline in auto sales in the country, marking the first such instance in 2024, a year that is yet to conclude.

To put the severity of the decline into perspective, the sales growth rate points to an aggregate 1.8% year-on-year decrease, with around 1.06 million units sold in the second quarter of 2024.

The question arises: What may have led to this situation?

According to auto car sales dealers and makers, the heavier than usual rainfall that India experienced during the months of June and July had a significant impact on auto sales figures during this period.

Shailesh Chandra, SIAM’s president, commented on the matter, stating, “Heavy rainfall in key states … did impact the sales numbers of some of the segments. Among segments, the increase in sales of utility vehicles, including sports utility vehicles (SUVs), slowed sharply to 9% in the quarter from 23.5% in the year-ago period. SUV sales have powered the industry for three years and account for roughly two-thirds of total sales. That has helped the likes of Mahindra & Mahindra and Toyota.”

However, while SUV sales have taken a hit, small car sales have not been thriving either. There has been a nearly 20% drop in the sales of small cars, with even market leaders such as Maruti Suzuki, a household name in India, and Tata Motors, which recently lost a colossal figure of leadership and success in Mr. Ratan Tata, suffering the consequences.

So, what does the future hold? Is the imminent future as dull as the recent past, or is it a period of continued strife?

Apparently, this may not be the case. Despite the dwindling car sales data from the aforementioned time period, the imminent future does not appear to be serenaded by dullness or prolonged struggle.

Interestingly, with the festive season already in full swing in India, this space is expected to sparkle with rich vigor.

Can Diwali turn things around for the better?

To put it mildly, the significance that the much-loved festival of Christmas holds for most of the world as a period of festivity is what the festival of Diwali signifies to India. Diwali is one of the holiest and most joyous times of the year for the country and marks new beginnings.

This is the time when consumers shop for significant household items, most prominently cars or other automotive purchases. To provide context, it is during the Diwali holidays and subsequent festivities that the average Indian consumer steps out to purchase useful and long-term articles such as automotive and other household items, including electrical appliances.

Therefore, it is during this time that Indian carmakers and their foreign counterparts or contemporaries will certainly hope to have a spring in their step, anticipating more bookings than what the bygone quarter offered.