Tata Motors has recently faced a significant setback in its sales performance, resulting in a notable impact on its stock value. In September 2024, the automaker reported a 15% drop in total sales compared to the same period last year. Tata Motors sold 71,345 units in September, down from 84,381 units in September 2023. This decline in sales was largely attributed to weak performance in both commercial and passenger vehicle segments.
The company’s domestic sales in September 2024 were recorded at 69,694 units, marking a 15% year-on-year (YoY) decline, while exports fell by 30%, selling only 1,651 units. Within the domestic market, the passenger vehicle segment saw an 8% reduction in sales, with 41,063 units sold compared to the previous year. Meanwhile, the commercial vehicle segment experienced a steeper drop, with sales plunging by 23%, totaling just 28,631 units.
This downward trend has had a noticeable impact on Tata Motors’ stock performance. Over the past month, the company’s stock has dropped by approximately 12%, reflecting investor concerns over the decline in sales and missing market expectations. Analysts had predicted more moderate declines, with estimates ranging from a 7% to 9% reduction in sales.
The primary reasons behind this sales slump include lower demand for heavy commercial vehicles (HCVs) and small commercial vehicles (SCVs), which are significant contributors to Tata Motors’ revenue. In addition, the lag in passenger vehicle sales also contributed to the weaker performance. Electric vehicle sales, while steady, were not enough to offset the overall decline in passenger vehicle numbers(Stock Market News).
Looking forward, Tata Motors remains cautiously optimistic about the future. The company anticipates a gradual recovery in the upcoming quarter, driven by factors such as easing monsoon rains, increased infrastructure spending, and the festive season, which is expected to boost consumer demand.
In terms of price action, Tata Motors’ stock dipped 1.04% on October 1, 2024, trading at ₹964.50. This dip follows a broader trend of declining stock value as investors digest the lower-than-expected sales figures for both the second quarter and September.
The company’s performance in the upcoming months will be closely watched as the Indian automotive market prepares for the festive season, a traditionally strong period for vehicle sales.
