NEW DELHI: The festive season this year has failed to bring cheer to the auto sector, which has already been reeling under a year-long slowdown.
Retail sales of passenger vehicles (PV) during the 42-day festive period this year grew by a meagre 1 per cent — to 3,43,319 units, against 3,41,561 units sold during the same period last year.
The season usually accounts for nearly one-third of the total vehicle sales a year.
Two-wheeler sales during the period saw degrowth, dropping 2 per cent to 18,99,032 units.
While the two prime events of the season — Navratri and Diwali — stretched from October to November during last year, the two festivals fell on the same month this year. Bulk-buying in October not only boosted retail sales of PVs, but also helped wholesale dispatches to break the year-long slowdown.
Retail PV sales increased 11 per cent YoY to 2,48,036 units in October 2019, while the total sales across categories increased 4 per cent to 17,09,610 units last month.
Two-wheeler sales increased by 5 per cent to 13,34,941 units in October, but Commercial Vehicle (CV) sales declined by 23 per cent last month to 67,060 units.
“October retails were in the positive, giving a much-needed respite to the auto industry and especially our dealer community after months of degrowth. The festivals saw very good footfalls at dealerships across most of the geographies; the consumer sentiment was positive, and purchase decisions were concluded as used to be during the growth years,” said Ashish Harsharaj Kale, president, Federation of Automobile Dealers’ Associations (FADA).
Going ahead, FADA remains cautious for the near and midterms post the festive season, as BS-VI transition date approaches and rural demand is yet to pick up due to an extended and excessive monsoon. It also asked retailers to reduce inventory to avoid losses during the transition.
Inventories at dealerships in October have come down to 25-30 days for PVs, and 35-40 days for two-wheelers.
“Though not at the FADA-recommended level of 21 days, two-wheeler inventory has reduced from alarming levels,” Kale said.