Two-Wheeler Sales At Dealerships Offer Hope Amid Auto Gloom
Inventory has eased off its alarming levels in February because of production cuts by automakers, but for two wheelers, it rose.
Demand for two-wheelers at dealerships offered some hope even as wholesale volumes of automakers continued to decline in May amid a consumption slowdown in India.
Retail sales of scooters and motorcycles rose 6.1 percent over the previous month in May, according to registration data released by the Federation of Automobile Dealers Association. That, along with 5.8 percent jump in three-wheeler sales, pushed the industry’s volumes higher.
Two-wheeler demand picked up because of marriage season buying and a slight improvement in liquidity, Ashish Kale, president at the dealers’ lobby, told BloombergQuint over the phone.
Still, that’s just a small respite as demand for cars and utility vehicles remained flat, and truck volumes contracted at dealerships.
Wholesales contracted across categories during the month, data released by SIAM earlier this month showed. Vehicle demand is one of the consumption indicators flashing red, along with consumer goods volumes, as India’s economic growth slowed to 20-quarter low. That prompted the central bank to cut rates again.
Even though there was an uptick in vehicle registrations over the previous month in May, volumes of all categories of vehicles contracted over the previous year, Kale said in a statement accompanying the data. That was largely because of a high base in May last year.
Inventory eased off its alarming levels in February because of production cuts by carmakers. But for two-wheelers, it rose again in May despite higher retail sales as makers of scooters and motorcycles shipped more vehicles.
According to the dealers’ federation, here are the average inventory levels in May:
- Passenger vehicles: Down to 35-40 days from 40-45 days in April.
- Two-wheelers: 55-60 days compared with 45-50 days in April.
- Commercial vehicles: Unchanged at 45-50 days.
While the situation continues to remain bleak, the dealers’ lobby is hopeful of a revival in two-three months.
“An accommodative RBI, an expected progressive budget, average monsoon and an overall stability to consumer sentiment due to political stability will all contribute towards the auto industry heading back into the growth,” Kale said in the statement. That, he said, could happen in the next eight to 10 weeks.