Auto retail sales down 11% in festive period on rise in fuel prices, insurance costs; high inventory worries FADA

According to FADA, total registrations during the 42-day festive period, which fell between 10 October and 20 November this year, stood at 20,49,391 units.

Press Trust of India November 23, 2018 14:20:23 IST
Auto retail sales down 11% in festive period on rise in fuel prices, insurance costs; high inventory worries FADA

New Delhi: Domestic automobile retail sales in the festive season declined by 11 percent this year due to dip in offtake of passenger vehicles and two-wheelers, according to FADA.

The Federation of Automobile Dealers Associations (FADA) said that with retail sales, calculated on the basis of total number of registrations, witnessing decline specially in two-wheeler and passenger vehicles (PV) segments, a substantially high amount of inventory has become "a matter of great concern".

According to FADA, total registrations during the 42-day festive period, which fell between 10 October and 20 November this year, stood at 20,49,391 units.

Auto retail sales down 11 in festive period on rise in fuel prices insurance costs high inventory worries FADA

Representational image. Reuters

Last year, the period was between 21 September and 1 November, and the industry witnessed total registrations of 23,01,986 units, it said.

PV registrations in this year's festive period stood at 2,87,717 units as against 3,33,456 units in the corresponding period last year, down 14 percent, FADA said.

Two-wheeler registrations also fell by 13 percent to 15,83,276 units as against 18,11,703 units in the year-ago period.

"We have not seen such a dull festive season in the past few years, as many negative factors came into play during this season which weakened the consumer sentiment and postponed their purchase decision," FADA president Ashish Harsharaj Kale said in a statement.

High fuel prices and insurance costs along with liquidity issues faced by non-banking financial companies (NBFCs) had affected consumer sentiment.

"Overall, we have seen unusual de-growth during the combined festive period, both in two-wheelers and PVs. Dealer inventory levels in both these segments have risen substantially as a result of this and is a matter of great concern," FADA said.

The inventory levels before the festivals began, were at around 60 days and 50 days for two-wheelers and passenger vehicles, respectively.

"The same merely came down to around 50 and 45 days post festivities and still remain higher than normal," it added.

The automotive dealers' body asked the government and the Reserve Bank of India (RBI) for further ease of liquidity for auto NBFCs saying "they are one of the key growth drivers in auto retail and are also operating in a less riskier business environment..."

Kale, however, said the dealers remain hopeful of recovery as overall inquiries during the festive period were robust, and postponement of purchase was the main reason for muted sales.

During the festive period, three-wheelers and commercial vehicles sales, however, grew 10 percent and 16 percent, respectively.

Meanwhile, FADA also said in the 1 April to 20 November period this fiscal, total vehicle registrations stood at 1,19,89,705 units as against 1,12,54,305 units in the year-ago period, up 6.5 percent.

Updated Date:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

India's GDP may turn positive at 1.3% in Dec quarter of FY2020-21: DBS Bank report
India

India's GDP may turn positive at 1.3% in Dec quarter of FY2020-21: DBS Bank report

The government will release the GDP numbers for the October-December quarter of the current fiscal on Friday

Bank holidays in March 2021: Banks to remain close for business on these dates; check full list
Business

Bank holidays in March 2021: Banks to remain close for business on these dates; check full list

Apart from these days, several banks might remain closed mid-March as many unions have called for a nationwide strike against the government's plan for making the banking sector private. The two-day-long strike is on 15 and 16 March.

Centre and states need to act in coordination to reduce tax on fuel, says RBI governor Shaktikanta Das
Business

Centre and states need to act in coordination to reduce tax on fuel, says RBI governor Shaktikanta Das

Das said that such coordination is needed because both the Centre and states impose taxes on fuel