Car sales slow down in September on high fuel costs, product price increase

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26 Aug, 2025 12:21

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Car sales of the top four manufacturers controlling 80 percent of the market were disappointingly low in September hinting at a third consecutive monthly drop in sales numbers for the industry.

An increase in product prices, higher fuel costs, jump in interest rates, low consumer sentiment and the on-going shraadh period (considered inauspicious for new purchases among Hindus) hit demand at the retail and wholesale level.

There have been no new product launches in the last couple of months except for that of a new people carrier by Mahindra & Mahindra. Some companies have even pushed forward launches by weeks to cash in on the expected demand surge during the festive season.

With a pan-India deficit of 9 percent in monsoons this year, as measured by the Indian Meteorological Department, rural demand for auto is expected to remain weak in the coming months. Also, Kerala, the biggest market in the south, is not expected to see a comeback in purchases over the next two months after floods hit the state in August.

Maruti Suzuki, the country’s largest car maker, reported 0.7 percent rise in sales of passenger vehicles to 1.51 lakh last month as against 1.5 lakh sold in the same month last year.

The Alto and Wagon R sales fell 9 percent while sales of Swift, Dzire, Baleno and Celerio grew only 1.7 percent. Dzire and Swift together make up 30 percent of the total domestic passenger vehicle volumes of the company.

Korean car brand Hyundai reported a 4.5 percent decline in sales for September to 47,781 units from 50,028 units in the same month last year.

Domestic passenger vehicle volumes at utility vehicle-specialist Mahindra & Mahindra (M&M) dipped 16 percent to 21,411 units as against 25,414 units. The fall came despite incremental volumes from the Marazzo, a 7-8 seater people carrier, launched by the company at the start of last month.

Rajan Wadhera, President, Automotive Sector, M&M said, “The month of September has been muted for passenger vehicles due to factors such as low consumer buying sentiment, high fuel prices and the effects of monsoon in many parts of the country”.

Tata Motors continued to remain the outlier posting a 7 percent growth in domestic passenger vehicle sales during September. The growth, however, was much lower than the cumulative growth of 31 percent posted during April-September.

The fourth largest car maker clocked sales of 18,429 units as compared to 17,286 units sold in the same month last year. Mayank Pareek, President, Passenger Vehicles Business Unit, Tata Motors said, "The growth for the overall PV industry is stressed with degrowth in all three months of the quarter. Early indications have been that the Industry has declined in September this year”.