The worst thing that has happened to the auto sector is no segment, be it passenger vehicles (PVs), two-wheelers, commercial vehicles (CVs) or three-wheelers, have been able to swim against the tide, according to auto industry associations. However, there are signs that a few segments are heading for a revival in future.
“There has been an improvement in retail sales of four-wheelers in the last two-three months. The upcoming festive season and pre-buying before BS-VI implementation is likely to push the demand…A favourable southwest monsoon would boost two-wheelers and tractors sales,” Automotive Component Manufacturers Association of India (ACMA) president Ram Venkataramani said on Wednesday, adding that a cut in GST rate from 28 per cent to 18 per cent would provide much-needed relief to the auto and auto components industries.
Industry experts, however, remain skeptical about any recovery in CV sales, with lack of finance and revision of axle norms continuing to hamper sales. According to the Federation of Automobile Dealers Associations (FADA), retail sales of PVs in May and June declined by 1 per cent and 4.6 per cent respectively as against double-digit falls seen in other segments.
Further, inventory levels in the PV segment are returning to the three-week level from the alarming 50-60 days that two-wheelers and CVs are struggling with. Though not entirely confident, the industry expects demand for PVs to revive post-September. However, its major concern still remains the lack of finance, with non-banking financial companies in trouble post the IL&FS crisis and ever-changing regulatory diktats on the manufacture and adoption of electric vehicles.
Retail sales of PVs down in May and June: FADA
The retail sales of passenger vehicles (PV) in the months of May and June this year declined by just 1 per cent and 4.6 per cent respectively as against double-digit declines seen in other segments. Further, inventory levels in the PV segment are returning to the three-week level from the alarming 50-60 days level that two-wheeler and CV dealers are currently struggling with