Passenger Vehicle Sales Remain Flat in July; Industry Pins Hope on Festival Season

The passenger vehicle industry remained sluggish in July, with both wholesale and retail volumes estimated to be flat year-on-year, following a decline in the previous month.

The industry is pinning its hopes on the upcoming festival season, kicking off with Onam and Ganesh Chaturthi in early September, for a demand recovery going forward.

According to estimates from India’s largest car maker Maruti Suzuki India, the total domestic industry volume during July was at around 3.48 lakh units, compared to 3.44 lakh units in July 2024. In June, the industry wholesales were at 3.12 lakh units. Maruti Suzuki’s Senior Executive Officer for Marketing and Sales Partho Banerjee noted that the industry’s retail sales are also flat at 3.28 lakh units. 

Passenger vehicle sales have been on a slow lane this year due to factors such as persistent weakness in demand for entry-level cars, which brings in a lot of first-time buyers to the market, and high base effect. 

For the full financial year 2026, the industry has projected sluggish growth in the range of 1-4% after recording 2% growth in FY25. Maruti Suzuki and Hyundai had forecasted the volumes to grow by 1-1.5% at the SIAM Looking Ahead Conclave earlier this year.

Sales of SUVs account for more than half of passenger vehicle sales in India. Maruti Suzuki’s Banerjee said the weakness in entry-level cars is a pain point for the industry.

“Overall industry is not growing. It is only resizing of the segments that is happening, which is not a good sign. The industry needs to grow, which is very important,” he said.

Banerjee also noted that demand in rural markets has been better than in urban markets. Geopolitical situations, trade tariffs and IT sector layoffs are impacting the sentiments in the urban market.

Maruti Suzuki dispatched 1.38 lakh passenger vehicles in the domestic market in July, which is flat from the year-ago volume. M&M’s sales reached 49,871 units in July, marking a robust 20% year-on-year growth.

However, Hyundai India saw its domestic dispatches fall over 10% to 43,973 units, while Tata Motors wholesale volumes declined 11% to 40,175 units.

M&M continued to pull ahead of Hyundai Motor and Tata Motors in July wholesales, even as a dip in retail registrations by M&M helped put Hyundai ahead of the other two in Vahan registrations.

Festive Hope

The festival season in India starts with Ganesh Chaturthi or Onam in Kerala towards August end or September beginning and extends till Bhai Dooj after Diwali, in November across the majority of the states. The period from the end of Shradh to Diwali is considered the peak festival season. 

This is a crucial period for automakers, with volumes accounting for a bulk of their annual sales, as consumers generally make big-ticket purchases during this time due to the cultural significance.

In the coming months, Banerjee said the demand is expected to be robust as the festival season is set to start with Onam in early September. “Since the festival season is going to start, after a long time in July, we have seen an upside on bookings, and growth is around 7%,” Banerjee said.

“We are quite confident that with the Onam and Ganesh Chaturthi, which is going to follow in the month of September, we are going to see green shoots coming.”

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