Retail Sales In February Point To Automakers Paring BS-IV Inventory

Retail auto sales remained subdued in February even as dealers offered discounts to exhaust existing inventory ahead of the transition to stricter emission standards.Vehicle registrations—a measure of sales at dealerships—fell 2.3 percent sequentially to 16.80 lakh units last month, according to data from 1,225 regional transport offices in 32 states and union territories, collated by BloombergQuint from the website of the Ministry of Road Transport and Highways. It, however, rose 1.2 percent over last year.Factory-gate sales for larger car and tractor makers were higher than retail sales in February, according to data released by companies. With sales at dealerships not picking up, the data indicates that companies are pushing Bharat Stage-IV inventory ahead of the April 1 rollout of BS-VI emission norms. That was corroborated by a BloombergQuint survey of eight large dealerships..Both retail and factory-gate shipments failed to make a meaningful recovery from a prolonged slowdown as Indians are spending less at a time economic growth is set to fall to a decade-low. The outbreak of the novel coronavirus in China, too, affected supply chains of a few automakers, including Mahindra & Mahindra Ltd., MG Motor India and Tata Motors Ltd..Retail auto sales remained muted despite a low base in the year-ago period when a liquidity crisis among non-bank lenders pulled back lending to the auto sector. To be sure, the data reflects issuance of registration certificate, and not bookings and—indicating that some of the sales may roll over to the next month..Here’s how individual segments fared in February....Passenger CarsPassenger car registrations fell 23.2 percent month-on-month but rose 11 percent over last year in February on the back of new entrants—MG Motors and Kia Motors. Factory gate sales of Tata Motors Ltd. (incl commercial vehicles) and Mahindra and Mahindra Ltd. remained subdued in February compared to retail sales during February..Sales of new entrant MG Motors and Kia Motors dipped on a monthly basis. M&M saw a jump in sales over last year..Two-WheelersSales of two-wheelers rose marginally on monthly and yearly basis as dealers offloaded BS-IV models ahead of the implementation of new emission standards from April 1. Hero MotoCorp Ltd. and TVS Motor Co. Ltd. saw lower factory gate sales..HeroMoto Corp, Bajaj Auto Ltd., Suzuki Motorcycle India Pvt. Ltd. and Royal Enfield saw a year-on-year rise in retail registrations in February.Also Read: The One Thing That’s Going In Favour Of Royal Enfield.Commercial VehiclesRegistrations of commercial vehicles rose sequentially in February but declined on a yearly basis..Ashok Leyland Ltd. saw an uptick in registrations in February..TractorsTractor registrations snapped their three-month gaining streak in February. Registrations fell 6.4 percent on a monthly basis, while they jumped 14.1 percent over last year..All tractor makers witnessed a decline in sales on a monthly basis.

Retail Sales In February Point To Automakers Paring BS-IV Inventory

Vehicle registrations—a measure of retail auto sales—fell 2.3% sequentially and rose 1.2% yearly to 16.80 lakh units in February.

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