PV retail sales rise 24% in Dec
NEW DELHI: Retail sales of passenger vehicles rose 24% from the year earlier in December boosted by a lower base and sustained demand momentum after the festive season.
Sales also received a boost from advance purchases by some customers as they chose to beat planned price hikes by automakers from January and growing preference for personal mobility during the pandemic.
The industry body of dealers has, however, predicted that sales may weaken in January as some companies have raised vehicle prices and as the upbeat mood of the festive season is expected to weak off.
A total of 271,249 vehicles were sold in December, up from 218,775 a year earlier, showed data issued by the Federation of Automobile Dealers Associations (Fada) on Monday.
The strong retail sales came despite a substantial reduction in discounts by companies due to depleted dealer inventory after decent retails during the recent festive season. Traditionally, carmakers offer the highest discounts in December to liquidate dealer stocks before the new year kicks in.
Automakers also gained from a lower base as most cut production substantially last year due to falling demand and transition to the Bharat Stage-VI emission norms.
December retail sales, however, declined from 291,001 units sold in November which saw robust demand during the Diwali festival. Sales, though, improved from 249,860 units in October.
In the two-wheeler segment, showroom sales of motorcycles and scooters jumped nearly 12% to more than 1.42 million units due to higher discounts by automakers and improved demand for executive segment or 125cc motorcycles.
Retails also rose on a sequential basis from November’s 1.41 million units and October’s 1.04 million units.
The commercial vehicle market, however, continued to languish, with retail sales falling 13.5% from the year earlier in December to 51,454 units.
“While December saw good spill over demand continuing from festive season and pre-buying due to price hike announcement, demand for vehicles in January looks to be bleak. Passenger vehicle segment may witness growth if demand supply mismatch is resolved,” said Vinkesh Gulati, president, Fada.
“With recent hikes announced by all OEMs, Fada expects a temporary blip in demand as customers will take time to absorb the same,” he added.
The retail sales data released by Fada is in line with December wholesales, or factory dispatch data released by individual automakers earlier this month. Sales at Maruti Suzuki Ltd increased 17.8% from the year earlier, while Hyundai recorded a 24.9% rise. Dispatches of two-wheelers by Hero MotoCorp and Bajaj Auto grew 3.16% and 4%, respectively in December.
The robust retails in December follows the faster-than-expected recovery in sales during Navratri and Diwali festivals in October and November, respectively. Passenger vehicle makers like Maruti and Hyundai reported a more than 20% growth in retails during the 42-day festival period.
During the festival season, spread across September through November, retail sales of passenger vehicles grew 13% from the year earlier to 431,597 units but that of two-wheelers fell 6.3% to 1.9 million units, according to the data from Fada.
Passenger vehicle makers recorded a growth in festive sales after two years.