Retail sales of passenger vehicles (PVs) in India grew a marginal 1% year-on-year to 257,271 units in November despite heavy discounts from manufacturers to clear piled up inventory at dealers.
The demand scenario underscores continued weak consumer sentiment in a country that grew at the slowest pace since March 2013 in the September quarter. The meagre pace of sales increase came in spite of a low base of the year-earlier month, when automakers experienced their worst festival season sales during Diwali in nearly five years due to the lack of liquidity following the bankruptcy of Infrastructure Leasing and Financial Services (IL&FS).
Retail sales of motorcycles rose 3% year-on-year in November to 1.7 million units, showed data issued by the Federation of Automobile Dealers Associations (Fada) on Wednesday. Special discounts by companies to clear dealer stocks aided growth.
The prevailing economic slowdown and consequent lack of activity in the infrastructure and manufacturing sectors led to a 8% drop in retail sales of commercial vehicles to 77,394 units.
Despite improving retails, companies have been reducing production and wholesales to cut stocks of Bharat Stage IV vehicles ahead of the implementation of BS VI emission norms from 1 April 2020. According to the factory dispatches data issued by the Society of Indian Automobile Manufacturers on Tuesday, passenger vehicle wholesales fell 0.8% year-on-year to 263,773 units last month.
A 10.8% drop in passenger car sales to 160,306 contributed the most to the overall decline. Sales of utility vehicles though rose almost by a third from a year ago to 92,739 units.
Overall, retail sales of vehicles across categories rose a modest 2% to 2.10 million units in November. This was the second consecutive month of increase in retail sales of automobiles since Fada began sharing the data from November last year.
Fada president Ashish Kale said the spill-over demand after the festive season in November extended the cheer for dealers with retail sales recording marginal growth in all segments except commercial vehicles, where demand remains weak.
“With some recovery in sentiment in November, inventory at showrooms remained more or less at the same levels in both two and four-wheeler categories," said Kale.