The passenger vehicle (PVs) sales in July would indicate the growth trend of the industry and since the economy is growing at seven per cent, the industry should also grow at a similar level, RC Bhargava, Chairman, Maruti Suzuki India (MSIL) has said.

“June, of course, was a bad month, so let’s see how July goes...we still have some days left in July. It should be normal demand in the country with the economy growing. The economy seems to be doing fine and all the other parameters are also not bad at all because the inflation is ok, and the optimism on rain was there,” Bhargava told businessline.

Talking about why in June the domestic PV wholesales (dispatches to dealers) increased by only three per cent y-o-y, Bhargava said that there is no specific reason to pinpoint.

“I am not quite sure why demand should go down, I can’t pinpoint...why there shouldn’t be the same demand (as in earlier months). Steady demand should mean at least six-seven per cent growth because the economy is growing at seven per cent at least. If the economy grows at seven per cent, there’s no reason why car demand should not grow by at least seven per cent. So, it is hard to explain what’s happening,” Bhargava added.

In June, total PV wholesales in the domestic market increased to 3,37,757 units compared with 3,27,788 units in June 2023. However, retail sales (direct-to-customer/ vehicle registrations), fell by around seven per cent y-o-y to 2,81,566 units in June from 3,02,000 units in the same month last year.

According to the Federation of Automobile Dealers Associations (FADA), June is traditionally one of the weakest months for India’s auto retail. This year, while the monsoon progressed normally up to Maharashtra, it lost momentum, delaying rains in West Bengal, Bihar, Uttar Pradesh, Chhattisgarh, and Madhya Pradesh.

“This exacerbated the effects of a severe heatwave in Northwest India, contributing to a prolonged hiatus that not only intensified the heatwave but also delayed the sowing operations of Kharif crops in Northern and North-Western regions, thereby impacting rural sales,” Manish Raj Singhania, President, FADA, said.

According to Singhania, the PV inventory level in June was between 62 and 67 days which accounted for 6-6.50 lakh vehicles. In terms of value, it was close to ₹60,000 crore worth of stock with the dealers.

“So with the advent of the even and better monsoon in July, and it was above average now, and evenly distributed across the country, along with marriage season accounted for push in PV retails. Until July 15, PV sales were up almost eight per cent y-o-y, which is a good sign, and that shows that we end July on a positive note,” Singhania told businessline.

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