Home > Auto News > Retail sales of passenger vehicles fall 4.6% in Jan

NEW DELHI : Retail sales of passenger vehicles fell 4.61% year-on-year in January to 290,879 units, showed data issued by the Federation of Automobile Dealers Associations (Fada) on Thursday.

Manufacturers typically witness subdued sales in January as they tend to witness robust sales in December aided by heavy discounts to clear year-end stocks.

The decline in retail sales in January, which comes on a low year-earlier base, reflects persistent unease in consumer sentiment and sluggish economic growth.

Showroom sales for two-wheelers and commercial vehicles also declined, indicating that the demand slump in the automobile sector is far from over.

For the second consecutive month, the industry had witnessed a decline in showroom sales, after a marginal recovery in October and November, when automakers offered record discounts to woo customers during the festive season.

Most manufacturers posted a drop in wholesales, or factory dispatches, in January despite controlling their inventory of Bharat Stage-IV (BS-VI) inventory, as they prepared for a gradual increase in dispatches of BS-VI compliant vehicles in the run-up to the 1 April 2020 deadline.

According to data released by the Society of Indian Automobiles Manufacturers (Siam), wholesales of passenger vehicles fell 6.2% year-on-year in January to 262,714 units.

Ashish Harsharaj Kale, president, Fada said automobile sales continued to be in the negative territory in January, barring three-wheelers, as several consumers are still to freeze their purchasing decisions amid the transition from BS-IV to BS-VI emission norms, he added.

“With the weak demand situation, liquidation of inventory of BS-IV vehicles is the top focus for dealers and Fada has already appealed to all manufacturers to switch over completely to BS-VI models. The last 14 months have been one of the toughest times for auto sales. Therefore, Fada has requested OEM’s that BS-IV vehicles billed further, which are not on the basis of customer orders, should be returnable, to avoid financial losses for dealers," Kale said.

As a result of the prevailing economic slowdown and increase in freight loading norms for trucks, retail sales of commercial vehicles fell 6.9% y-o-y to 82,187 units. The slowdown in consumption in rural markets and increase in prices of motorcycles and scooters, due to higher insurance costs, led to 8.8% y-o-y fall in sales of two-wheelers to more than 1.26 million units.

The Indian economy clocked just 4.5% GDP growth in the September quarter. Consequently, the Reserve Bank of India had cut its FY20 growth forecast from 6.1% earlier to 5%.

According to a survey conducted by Siam, dealer inventory of passenger vehicles in January fell to 15-20 days from 20-25 days in the preceding month. For two-wheelers and commercial vehicles, it declined from 30-35 days to 20-25 days. Overall, retail sales of vehicles across categories, during the period, declined by 7.1% y-o-y to 1.75 million units.

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