August passenger vehicle retail sales down 7% YoY, but improves sequentially1 min read . Updated: 09 Sep 2020, 01:19 PM IST
- With retail sales picking up after the lifting of the lockdown in May, most manufacturers are trying to ramp up production in line with the demand, and building inventory at dealerships for the upcoming Navratri and Diwali festivals
Retail sales of passenger vehicles declined 7% year-on-year to 178,513 units in the domestic market in August due to covid-19 related disruptions, according to data released by Federation of Automobile Dealers Associations (Fada) on Tuesday.
Showroom sales though improved from 157,373 units sold in July due to increase in demand in rural and semi-urban markets and shift in customer preference for personal transport to avoid getting infected. The same trend was witnessed in the two-wheeler and tractor segments.
With retail sales picking up after the lifting of the lockdown in May, most manufacturers are trying to ramp up production in line with the demand, and building inventory at dealerships for the upcoming Navratri and Diwali festivals. Factors like rising cases of Covid-19 and lack of availability of manpower have limited the ability of auto makers to increase production. Intermittent lockdowns announced in certain states has also impacted retail sales.
According to Vinkesh Gulati, president, Fada, along with the rural market, which was leading the revival process till now, recovery in demand was also witnessed in urban centres during the month.
“Passenger vehicles after five months saw decline reduced to single digits as customers who were sitting on the fence, finally concluded their purchase during ongoing festivals of Janmashtami and Ganesh Chaturthi. Entry -level passenger vehicles were in high demand as personal mobility is being preferred with current pandemic showing no signs of reduction," added Gulati.
As a result of the sudden halt in economic activity due to the pandemic, retail sales of commercial vehicles also declined by a massive 57.4% to just 26,536 units.
Showroom sales of motorcycles and scooters also dropped 28.7% to 898,775 units during the month. Retail sales though improved marginally from 874638 units in July due to quicker recovery in demand for entry and executive segment of motorcycles in rural and semi-urban areas.
The retail data released by Fada is in sharp contrast with the wholesale dispatch data released by automobile manufacturers. Maruti Suzuki Ltd reported a 21.7% y-o-y increase in wholesales while Hyundai also clocked 19.9% rise. Two-wheeler dispatches by Hero MotoCorp also recorded a jump of 8.5% during the period.
August is usually considered a weak month for vehicle sales.