Total vehicle retail sales continue to be on the decline.

Total vehicle retail sales in the country continued to decline year-on-year in September 2020, even as passenger vehicle registrations turned positive for the first time since March growing at 9.81% during the month, as per data from the Federation of Automobile Dealers Associations.

Total vehicle registrations fell to 13.44 lakh units in September 2020, down 10.24% from about 14.98 lakh units in the year-ago month. However, month-on-month, the registrations saw double-digit growth of 11.45%, raising hopes of “high growth period” in the months of October and November due to the upcoming navratri, Durga puja and Diwali festivals.

The data released on Thursday showed that passenger vehicle registrations grew 9.81% to over 1.95 lakh units, while two-wheelers registrations declined 12.62% to 10.16 lakh units and commercial vehicle registrations fell 33.65% to 39,600 units.

Tractor registrations continued their good run zooming 80.39% to 68,564 units.

“With social distancing on customer’s mind coupled with government’s push to further normalise business conditions, and banks becoming more considerate to finance vehicles, entry level passenger vehicles saw good demand, thus indicating a preference for personal transportation over public,” FADA President Vinkesh Gulati said, adding that new launches and a lower base from last year aided the positive PV growth.

He added that tractor sales continued the “dream run” as Kharif sowing witnessed strong progress in terms of area covered till date compared to last year. Additionally, with good Rabi season driving growth in disposable income, rural markets “saw its rub off effect on 2-Wheeler, small passenger vehicles and small commercial vehicles”.

“While till recently the economic revival was mostly limited to rural India…the top States which make up half of India’s economic output (Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, Gujarat and West Bengal) are now showing signs of revival…This has also helped in creating a demand for automobile sales,” Mr Gulati said.

Talking about the outlook, the industry body said it anticipates “high growth” driven by festive demand in October and November coupled with no more lockdowns.

“As a caveat, with festival season round the corner and elections approaching in Bihar, the risk of Covid spread resurging may play a spoilsport in specific regions. Inventory for 2W stands at 45-50 days and PV stands at 35-40 days. Any dampener in vehicle sales during the upcoming festivals will have a catastrophic impact on dealers financial health,” FADA warned.



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