Good cheer for carmakers as retail sales surge in January

FADA said that monthly registrations have recorded a more than expected spike due to extended stock clearance sales and new model launches.

Published: 08th February 2019 10:05 AM  |   Last Updated: 08th February 2019 10:05 AM   |  A+A-

FADA President Ashish Harsharaj Kale

FADA President Ashish Harsharaj Kale

Express News Service

The muted customer sentiment dragging down passenger vehicle sales over the October-December quarter saw a sharp reversal in January, with data from the Federation of Automobile Dealers’ Associations (FADA) showing that retail sales surged 34 per cent during the month compared to December 2018.

According to FADA, which collected vehicle registration data from 1,081 out of the 1,437 regional transport offices (RTOs) in India, passenger vehicle (PV) retail sales during the month stood at 271,395 units, up 34 per cent month-on-month compared to 202,585 units in December 2018.

FADA said that monthly registrations have recorded a more than expected spike due to extended stock clearance sales and new model launches. “Consumers’ interest, which had remained buoyant, has slowly but surely started converting to sales... Overall positivity compared to the previous months backed by good retail offerings has helped car sales. New launches during the month also added to the overall excitement and got the attention of the buyer,” FADA President Ashish Harsharaj Kale said.

Highly popular launches in January included Maruti Suzuki’s new WagonR and Tata Motors Harrier. And despite price hikes announced by almost all manufacturers this year, extended offers and sales by dealerships have served to keep prices down and sales ticking.

According to a survey conducted by FADA among its members, current inventory levels for PVs range from 30-35 days. The FADA president also said that although all sectors have shown signs of positive growth on a monthly basis, two-wheeler growth rates are not healthy and are only in the positive range due to a low base in December. Retail sales of two wheelers stood at 11,89,679 units in January as against 11,41,209 units in December, up  4.25 per cent.

FADA also noted that the inventory of two-wheeler dealers continues to be high (55-60 days), since retail sales are still under pressure. The association said that it hoped that two-wheeler manufacturers would take a realistic stock of the situation on the ground and reduce wholesale billing. The country’s top two two-wheeler makers -- Hero MotoCorp and Honda Motorcycle and Scooter India (HMSI) -- reported sales declining at 9 and 18 per cent in January.

Meanwhile, FADA’s data shows that commercial vehicle (CV) retail sales grew marginally to 53,732 units in January from 53,712 units in December. “Commercial vehicle growth is flat, and has substantially dropped from the high growth rate it had maintained through the year to date,” Kale said. Going forward, FADA hopes that retail vehicle sales see an uptick with Interim Budget announcements putting more money in the hands of consumers. Finance minister Piyush Goyal had announced a tax rebate for individuals with taxable income up to Rs 5 lakh and unveiled an income support scheme for small and marginal farmers.

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