Vehicle Registrations Fell Over 12% In September, Says Auto Dealers’ Body
Retail auto sales continued to decline at dealerships in September, despite the festive season and heavy discounts, FADA says.
Auto sales continued to decline at dealerships in September, despite the start of the festive season and heavy discounts offered by dealers.
Retail auto sales, measured by vehicle registrations, fell 12.9 percent year-on-year in September. Of this, passenger vehicle sales dropped the most by 20.1 percent, followed by commercial vehicle sales at 18.5 percent, according to data released by Federation of Automobile Dealers Associations.
Retail sales of two-wheelers fell 12.1 percent over the previous year.
Heavy monsoon in some areas and the month of Shraadh—a period considered inauspicious for new purchases by Hindus—contributed to this sales lag, FADA President Ashish Harsharaj Kale told BloombergQuint.
“The auto industry retails were under pressure during the month and the de-growth was on expected lines,” Kale said, adding the effect of positive measures announced by the government—like the cut in corporate tax rates—wasn’t visible at the retail level in September.
Wholesales—units moving out of the factory gate—for cars, scooters, motorbikes and trucks in September also indicate a sharper drop over the previous year as automakers reduced the number of production days in a bid to normalise dealer inventory.
The auto industry has been struggling to push sales since the festive season last year. Increased upfront insurance costs and higher fuel prices kept buyers away initially. Discounts too failed to lift demand, forcing automakers to cut production or shut showrooms as inventory piled up.
While commercial vehicle inventory dipped marginally as dealers prepared for the shift to stricter Bharat Stage VI emission norms, that of passenger vehicles rose anticipating good festival demand. Two-wheeler inventory continues to be a cause of concern for dealers despite factoring in this year’s season demand.
According to FADA, these were the average inventory levels in September:
- Passenger vehicles: Rose to 30-35 days from 25-30 days in August
- Two-wheelers: 60–65 days (same as August).
- Commercial vehicles: Down to 50-55 days from 55-60 days in August.
Outlook
Dealers, however, hope sales to pick up going ahead. “Overall improvement in sentiment and confidence can be seen across our members as retail liquidity eases and with improving retails, dealer liquidity will also soon see improvement,” Kale said. “October will be crucial which will indicate trends for second half of the year and measure the effects of an abundant monsoon and various government measures.”