FADA Data: Retail Auto Sales Fall 7% In January, Says Dealer Body

Car and two-wheeler sales fell in January as customers stayed away from making purchases.

Retail auto sales, measured by vehicle registrations, declined 7 percent year-on-year in January, according to data released by the Federation of Automobile Dealers Associations.

Two-wheeler sales recorded the highest drop across categories. Three-wheeler sales, on the other hand, rose for the sixth consecutive month. Sales of tractors—which the association disclosed for the first time—rose over the same period, the data showed.

“Auto sales continue to be in the negative territory in the month of January, except for 3W, with many consumers still not concluding on their decisions. Ongoing Transition of BS-IV to BS-VI is also a factor in delayed purchase decision,” FADA President Ashish Kale told BloombergQuint.

That comes as domestic sales of passenger vehicles fell 6.2 percent year-on-year to 2,62,714 units in January, data released by the Society of Indian Automobile Manufacturers showed, as the worst slowdown in the sector in more than two decades showed no signs of recovery.

The inventory among dealers fell further last month as they took in fewer cars that weren’t compliant with the BS-VI emissions standards.

According to FADA, these were the average inventory levels in January:

• Passenger vehicles: Fell to 15–20 days from 20–25 days in December 2019.
• Two-wheelers: Dropped to 25–30 days from 30–35 days in December.
• Commercial vehicles: Declined to 25–30 days from 30–35 days in December.

Outlook

Over two-thirds of all dealers surveyed by the FADA expect sales in February to either remain unchanged or contract over the previous year. “With continued weak consumer sentiment and the overall economic situation, as well as the upcoming BS-VI transition, the near-term demand situation will continue to be dynamic,” Kale said.