NEW DELHI: Retail sales of automobiles continued to remain in the negative territory as total sales across categories declined by 5.4 per cent to 16,46,776 units in June, against 17,40,524 units in the same month last year. Even more worryingly, commercial vehicle sales declined by nearly 20 per cent.
According to data released by the Federation of Automobile Dealers Associations (FADA), retail sales of passenger vehicles (PV) in June declined by 4.6 per cent to 2,24,755 units, two-wheeler sales declined by 5 per cent to 13,24,822 units and commercial vehicle (CV) sales declined by 19.3 per cent to 48,752 units.
The nearly 20 per cent drop in CV sales comes at a time when truck rentals have been down by 11-14 per cent in major freight routes since last November and the trucking capacity is high. It is to note that on Monday, Ashok Leyland had announced stopping production in one of its plants for nine days this month, due to weak sales.
Fall in sales of commercial vehicles is seen as a sign of economic slowdown with lower demand for trucking. “Despite starting the month with a positive outlook and hope, monthly sales ended in de-growth due to continued liquidity tightness and the much-delayed monsoon. Despite inquiry levels being reasonably strong, retail sales got affected as consumer sentiments continued to be weak and purchase postponement was seen across all segments,” said FADA president AH Kale.
FADA data also showed that two-wheelers and CV inventories increased further and continue to remain a serious cause of worry for auto dealers. Average inventory for two-wheelers ranges from 60-65 days, while that of CVs ranges from 55-60 days. “With the ongoing pressure and premium on dealer working capital, coupled with falling sales, this can turn into a serious situation for the dealers if not corrected at the earliest,” FADA said.
16,46,776units of vehicles sold in June 2019, against 17,40,524 last year4.6%
fall in sale of passenger vehicles