After 3 years of bumper sales, car companies lower forecast

NEW DELHI: After blockbuster post-Covid years, the car industry now stares at a squeeze, with companies slashing wholesales to dealerships as buyers have become cautious and are not willing to spend freely, despite steep discounts.
The car industry had enjoyed a housefull at dealerships since the economy started to open up around 2021 after Covid and demand for personal mobility skyrocketed.However, companies are facing a difficult period after a long time as hefty discounts have come back with slowdown and even the festive period has failed to bring in large volumes.
Wholesale figures released by industry body Siam show that dispatches of passenger vehicles went down 2% for Q2 (July-Sept) FY25, which is surprising as companies start building up pre-festive inventory during this period. Against 10.7 lakh units sold to dealerships in second quarter of FY24, the numbers this time stand at 10.5 lakh units.
The situation is equally worrisome for first half (April-Sept ’24-25) where dispatches are up a marginal 0.5% at 20.8 lakh units against 20.7 lakh units in the same period of the previous fiscal.
Shailesh Chandra, president of Siam and MD for passenger vehicles and electric mobility at Tata Motors, said the industry may grow by low single digit this year. “The first half for the passenger vehicle industry been flat and even if we grow by over 5% in the second, we will end up at sub-5% for the full year,” Chandra said.
Siam had given a growth forecast between 5-8% for the industry at the beginning of this fiscal. The past few months have seen top auto makers try and balance inventory levels to the market’s new reality.