Retail sales of passenger vehicles decline 20% in Sep
NEW DELHI: Showroom sales of passenger vehicles declined 20% year-on-year to 157,972 units in September, the sharpest fall on record, according to the data released by Federation of Automobile Dealers Associations (FADA).
Expecting a reduction in the goods and services tax (GST) imposed on vehicles, customers stayed away from showrooms during Onam and Ganesh Chaturthi in the southern and western states.
The fall, the steepest since FADA started to publish retail sales data in November last year, reflects the slowdown in the overall economy and poor customer sentiment in the run-up to Navratri and Diwali.
The Shradh period in September, which is considered inauspicious for buying vehicles in northern and western states, may have also led to the low sales. Over the last one year, there has been a significant gap between the retail data published by FADA and wholesale data released by the Society of Indian Automobile Manufacturers (Siam), the lobby group of automobile manufactures. But in September, both data sets indicate a similar drop.
Wholesale dispatches of passenger vehicles slumped 23.7% year-on-year to 223,317 units in September, the eleventh straight month of such decline. Expecting sales to continue to decline during the month, manufacturers held back from pushing inventory to dealers.
Dispatches of passenger cars fell a massive 33.4% to 131,281 units during the month, but utility vehicles bucked the trend and rose 5.5% year-on-year to 81,625 units, helped by new launches, according to data released by Siam on October 11.
According to Ashish Harsharaj Kale, president, FADA, continued heavy monsoons in major states and the Shradh period contributed to this passenger vehicles sales lag. The complete effects of the positive measures announced by the Union government were still not visible at the retail levels during September.
“FADA believed September to be a transition month into positivity with continued monsoon and measure after measures being announced by the government. The retails were under pressure during the month and the decline was on expected lines. The corporate tax cuts are not a direct positive for auto retails, but hopefully the savings by corporates will result in higher outflow in promotional offers and marketing spends, which will result in some positivity in the market,” added Kale.
In the commercial vehicle segment, showroom sales declined by 18.5% year-on- year to 63,518 units against the backdrop of a slowdown in overall economic activity, especially in manufacturing and infrastructure.
Increased load carrying capacity of trucks also restricted fleet owners from buying new vehicles.
Reflecting the slowdown in the rural markets due to lower farm income and floods in states like Maharashtra, Bihar and Assam, retail sales of twowheelers also decreased by 12.1% year-on-year to 1,098,271 units.
WHOLESALE DISPATCHES OF PASSENGER VEHICLES SLUMPED 23.7% YEARON-YEAR TO 223,317 UNITS IN SEPTEMBER