(Reuters) - Mahindra & Mahindra led Indian carmakers' resurgence in sales in September, after a two-month lull, data showed on Tuesday, as dealers stocked up ahead of the festive season, although Tata Motors suffered as a tax change hurt EV sales.
Mahindra, among the country's top SUV makers by market share, said its domestic car sales rose 24% year-on-year, while the Indian units of Japan's Toyota and South Korea's Kia posted sales increases of 14% and 17%, respectively, including exports.
These firms make up over a fifth of domestic car sales and sell mostly SUVs.
Sales from manufacturers to dealers slowed drastically to a mere 0.7% increase from April to August, from 8% over the same months last year, per industry data, as the demand for cars tapered off after roughly two years of surging growth.
The growth was also helped by dealers anticipating a jump in sales during the festive period, which will run from early October to early November this year. Indians typically make big-ticket purchases during festivals since it's both auspicious and they get big discounts.
However, top EV maker Tata Motors' domestic sales slid 8% in September, falling for the fourth straight month.
The company blamed high inventory at dealers, the expiry of some government incentives on EVs and the lapse of road tax waivers on EVs in certain states.
"Electric Vehicle sales in personal segment was affected by the lapse of registration and road tax waivers in key states," Tata Motors said in a statement.
One analyst also noted that Tata's 'Nexon' SUV, which it makes in both petrol and EV variants, was also hurt by rival SUV models, including Mahindra's 3XO.
"The Nexon is impacted despite the price cut and discounts. There's softness because of some brand fatigue," said Amit Hiranandani, automobile sector lead analyst at brokerage SMIFS.
(Reporting by Varun Hebbalalu and Nandan Mandayam in Bengaluru; Editing by Abinaya Vijayaraghavan)