Domestic passenger vehicle sales to grow between 3-5% this fiscal: SIAM

New Delhi: Domestic passenger vehicle wholesales are expected to grow by 3-5 per cent this fiscal with the industry pinning hopes on strong performance in the festive period after witnessing a flattish first half, automobile industry body SIAM said on Monday.

At the start of the current fiscal, the Society of Indian Automobile Manufacturers (SIAM) had pegged the passenger vehicle (PV) sales to grow between 5-8 per cent this fiscal.

For the April-September period this fiscal, PV sales stood at 20,81,143 units, registering a marginal growth from 20,70,960 units in the same period of 2023-24.

In a press briefing here, SIAM President Shailesh Chandra said the industry was expecting to post growth in the April-September period.

"It was a slight surprise, especially the month of May and June, which did not play out as per our expectations. I would say April was still good... and then we saw moderation in May and June which affected us badly." Sales went up in September but were offset by the Shradh period and that is why the industry expects a sub-5 per cent growth in FY25, he added.

"Second half (H2) of the year has a big burden now and hopefully the festive period should be able to deliver on the growth expectations," Chandra said.

He noted that in the first 12 days of October, there has been a 25 per cent increase in retail sales, as compared to previous month, signalling robust offtake in the festive period.

Citing the impact of high base effect, Chandra said PV sales jumped from 2.6 million units in FY20 to 4.2 million units last fiscal.

"... And therefore the base effect is high, while the growth rates are flattish or in slight decline... But there is also a high level of demand. I think that itself is a big thing for the industry," Chandra said.

The festive season is also expected to help in reducing inventory levels built up in the second quarter, he said.

Commenting on the second quarter performance, he stated that the overall domestic automobile industry remained strong with a 9 per cent growth as compared to the same period of 2023-24.

Two- and three-wheelers continued to post strong growth of 13 per cent and 7 per cent respectively, while PVs and commercial vehicles posted some degrowth in Q2 of 2024-25 compared to 2023-24.

"Heavy rainfall in key states and almost the entire ‘Shradh’ period falling in the month of September, did impact the sales numbers of some of the segments. With monsoon ending and continued infrastructure spending, and the arrival of the festive season boosting consumption, we anticipate healthy demand in the next quarter," Chandra said.

SIAM Director General Rajesh Menon said that although the PV segment de-grew by around 2 per cent in Q2 of 2024-25 as compared to Q2 of last year, for the third time it crossed the 1 million mark in Q2, posting a sales of 1.06 million units.

Two-wheelers posted sales of 5.18 million units in Q2 for FY 24-25 as compared to 4.6 million units in Q2 of last year, he said. Three-wheelers posted the highest ever sales of Q2 with 2.09 lakh units, Menon said.

Commercial vehicles sales declined 11 per cent year-on-year in the second quarter this fiscal as compared to the year-ago period. Domestic PV wholesales in September witnessed a dip of 1 per cent year-on-year to 3,56,752 units as compared to the same month last year.

The total dispatches to dealers from companies stood at 3,61,717 units in September 2023, SIAM said.

Total two-wheeler sales, however, rose 16 per cent year-on-year to 20,25,993 units last month, as compared to 17,49,794 units in the year-ago period, it added.

Total three-wheeler wholesales witnessed a 7 per cent on-year increase to 79,683 units, as against 74,671 units in September 2023, SIAM said.