NEW DELHI: The Federation of Automobile Dealers Associations (FADA) on Monday said consumer sentiment and demand for automobiles continues to be “quite weak”. FADA in a statement said that sales of new passenger vehicles have dropped by 11 per cent in July 2019 to 243,183 units from 274,772 units a
year ago.
However, owing to the onset of the monsoon and a weak base in June, retail passenger vehicle sales registered a 7 per cent growth month-on-month.
“July sales continue to be in the negative zone year-on-year. However, some respite is seen with growth in month-on-month numbers, mainly due to revival of the monsoon bringing some positivity and June having the second-lowest volume base this calendar year since February,” Ashish Harsharaj Kale, president, FADA, pointed out.
The industry body also added that even as PV inventory levels in dealer showrooms improved to 25-30 days in July from 30-35 days in the previous month, the average inventory of commercial vehicles and two-wheelers remains high. The average inventory of commercial vehicles still ranges between 55-60 days, while two-wheeler inventories range between 60-65 days, both at their highest level so far.
According to FADA, two-wheeler sales reported at 8 per cent drop year-on-year to 1,332,384 units from 1,403,382 units a year ago, while CV sales reported a 14 per cent drop to 23,118 units, as against 26,815 units.
FADA also urged manufacturers to help lower inventories at the earliest by regulating wholesale supplies. “The concern gets even more grave considering that the transition to BS-VI norms is now just six months away and will leave crores of the unsold BS4 inventory obsolete,” it said. Wholesale automobile sales in India witnessed its sharpest decline in nearly 19 years in July, dropping 18.71 per cent year-on-year.
Kale, however, went on to say that the recent rate cut by the RBI is a big positive since it will help push sales.