Auto Sales Tumble In February As Slowdown Bites
Sales of cars, two-wheelers and trucks fell in February as India’s auto industry continues to grapple with a slowdown since last Diwali.
All segments of the auto industry saw a decline in sales over a year ago, according to registration data released by the Federation of Automobile Dealers Associations. As a result, inventory piled up. That puts wholesale growth of automakers at risk as dealers look to exhaust the existing stock before placing fresh orders.
Demand for cars and two-wheelers has slowed since September as compulsory thirty-party multi-year insurance increased upfront. Higher fuel prices also deterred buyers during the Diwali festival season, usually an auspicious period for purchases. Year-end discounts that continued in the new year failed to lift demand. For trucks, credit-crunch faced by non-bank lenders has made financing difficult.
Inventory Piles Up
- Commercial vehicles: 45-50 days
- Passenger vehicles: 50-60 days
- Two-wheelers: 80-90 days
Auto sales are experiencing a prolonged slowdown with sales slowing for the sixth straight month, Ashish Harsharaj, president at the federation, said. There are few positive triggers, he said, adding that inventory across all categories is “unsustainable” and is at “alarming levels” for two-wheelers.
Motorbikes and scooters’ inventory is at the highest level among all categories, according to the federation data. Sales of trucks, however, rose month-on-month, helping the industry pare some stock, Harsharaj said.