Passenger vehicle sales grow 10% in September
Overall automobile retail sales declined 13% in September from a year earlier to 12,76,302 unitsTwo-wheeler retail sales stood at 10,16,977 units, down 13% YoY
MUMBAI : For the first time this fiscal, retail sales of passenger vehicles (PV) witnessed a year over year growth in September with PV retail volumes growing 10% YoY to 195,665 units, according to data from Federation of Automobile Dealers Associations (Fada).
The jump in PV retail sales was due to multiple factors including opening up of the urban markets from covid-19 related restrictions, improved accessibility to vehicle financing by the banks, new car launches and availability of model variants across dealerships besides widespread preference for personal model of transportation over public.
To be sure, the growth comes over the low base of 178,189 units during the year-ago period.
The growth in retail PV sales follows the almost 30% YoY growth in wholesales of passenger vehicles in September by leading carmakers including Maruti Suzuki India Ltd, Hyundai Motor India Ltd, Kia Motors India, Tata Motors Ltd, Mahindra & Mahindra Ltd (M&M), Honda Cars India and Toyota Kirloskar Motor India reported a YoY
As a result, Fada said the passenger vehicle inventory levels have gone from sub-25 days from 2 months ago to about 40 days currently.
“While rural was driving the overall demand so far, we have seen an uptick in the demand across urban and semi-urban markets during September," Vinkesh Gulati, president, Fada told Mint in an interview on Thursday.
He said even as September saw a two-week long Shraadh period (considered to be an inauspicious period), which was a dampener, vehicle deliveries picked up sharply from the third week.
"September turned out to be the first effective month of unlock for several states including Maharashtra, Bihar, Chhatisgarh and others as the number of containment zones reduced. This helped in improving passenger vehicle retails," Gulati said.
He added that top states including Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, Gujarat and West Bengal, which together make up for half of India’s economic output, are now showing signs of revival as economic activities in these states are at its peak since lockdown began in March.
“This revival has also helped in creating demand for automobiles," Gulati said.
Overall automobile retail sales declined 13% in September from a year earlier to 12,76,302 units as sale of two-wheelers, commercial vehicles (CV) and three-wheelers continued to be under pressure amid the ongoing covid-19 pandemic.
However, data released by the Federation of Automobile Dealers Associations (Fada) on Thursday also suggested that the vehicle registrations have improved 14% month-on-month over August.
Meanwhile, two-wheeler retail sales stood at 10,16,977 units, down 13% YoY. The three-wheeler and CV retail volumes for the month were at 24,060 units (down 59% YoY) and 39,600 units (down 34% YoY) respectively.
“Overall, 2-wheeler, 3-Wheeler, and CVs continued to march ahead on MoM basis and inched up to narrow their gap with last year’s sale even though pre-covid levels are yet to be seen across all categories," Fada said in a note.
However, with uncertainty around the covid-19 infection, the association warned that any dampener in vehicle sales during October and November would have a ‘catastrophic’ impact on dealerships’ financial health.
“Fada advises extreme caution to both OEMs and the dealers to avoid building any further inventory as this may lead to a disastrous situation similar to last 2 festive seasons when sales were below the mark," it said. The two-wheeler inventory currently stands at 45-50 days, it added.
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