Indian passenger vehicle sales plunge in December, signaling market slowdown
India's passenger vehicle (PV) manufacturers are bracing for a significant drop in dealer dispatches this December, signaling a market slowdown. Industry experts predict December sales to fall between 2,75,000-2,80,000 units, marking the first time in 2023 that monthly volumes dip below 3,00,000 units. This decline is attributed to reduced demand following the festive season and the impact of last year's high base, prompting automakers to cut back on dispatches.
Last month's sales are always the lowest
There's a typical trend of the final month in a year being the least robust in terms of sales compared to the preceding 11 months. This is because the buyers anticipate the new year for model changes and year-end benefits.
Highest absolute decline in two decades
Compared to November, this month's volumes might shrink by 55,000 units, the largest absolute decrease in the past two decades, except for December 2021. Shashank Srivastava, Senior Executive Officer of Sales and Marketing at Maruti Suzuki India, mentioned that stock levels at the start of December were around 3,30,000 units, which is considered high for this month when carmakers and channel partners prefer minimal stock levels. The stock levels in end-December should come down to around 1,50,000, he added.
High stock levels at dealerships raise concerns
Manish Raj Singhania, President of the Federation of Automobile Dealers Association (FADA), revealed that stock levels at car dealerships across India have reached concerning levels, with nearly 7,00,000 PVs in the system, equivalent to over 60 days of sales. FADA has reached out to the Society of Indian Automobile Manufacturers Association and financiers, urging them not to burden dealers with excessive stock or overfunding.
Hyundai expects record sales for both industry and itself
Despite the overall downturn, Tarun Garg, Chief Operating Officer at Hyundai Motor India, projects December sales to hit 2,87,000 units, a 3-4% increase compared to last year. Hyundai's sales are anticipated to reach 42,500 units, a 10% YoY growth. Garg is optimistic that both the industry and Hyundai will have a record-breaking calendar year, with sales expected to hit 4.1 million units, an approximate 8.1% YoY increase.
