NEW DELHI: Despite showing signs of recovery during the festive season in October and November, retail auto sales fell the most in December last year as weak consumer sentiments continue to hamper the demand.
According to data released by the Federation of Automobile Dealers Associations’ (FADA), total auto retail sales fell 15 per cent year-on-year (YoY) to 1,606,002 units against 1,880,995 units sold in December 2018.
“With the December de-growth being the highest in this fiscal, FADA shares its concern on falling auto sales and shifts its stance to very cautious for the near and mid-term as we inch towards BS-VI transition,” FADA said on Tuesday.
According to FADA, commercial vehicle sales reported the highest drop at 67,793 units (-21 per cent YoY), followed by two-wheeler sales at 1,264,169 units (-16 per cent YoY) and passenger vehicles at 215,716 units (-9 per cent YoY). The sharp drop came even as the industry was offering best offers to uplift sentiment and combat slowdown.
Retail sales and wholesale dispatches of automobiles have been registering negative growth for over a year as slowdown in Asia’s third largest economy has deepened. Fall in rural economy and substantial rise in prices of automobiles has adverse impact on sales.
“Consumer sentiment continues to be very weak as customers did not conclude on the purchase even after taking the efforts of inquiring and despite the best offers being available,” said Ashish Harsharaj Kale, president, FADA.
The decline, according to Kale, has denied the dealer community an opportunity to reduce its BS-IV inventory making the transition to BS-VI trickier. He added that FADA will work towards seeking relief from the Supreme Court as it is extremely difficult for members to continue the current business and also ensure a nil BS-IV inventory on March 31.
“FADA looks forward to demand spurring initiatives in the Union Budget and specific initiatives for the auto industry based on our feedback for faster revival of the much needed sustainable growth,” the association said.