Vehicle sales up in Feb after 11 months

Automobile retail sales in general — excluding passenger vehicles (PVS) — grew in February, after nearly 11 months of yearon-year (YOY) fall.

However, dealers say despite the YOY growth, overall retail sales were much below expectation. The anticipated pre-buying ahead of the April 1 deadline for a switch to vehicles meeting the higher BS-VI emission standards, which will be costlier, is not being seen.

While overall automobile sales rose 2.6 per cent in February, those of PVS dropped nearly 1.2 per cent, compared to the same month last year. This was the only segment to see a fall — it appears customers are postponing their purchases in the hope of getting good discounts closer to the deadline.

According to the Federation of Automobile Dealers Associations (FADA), apex body of the segment’s retail industry in the country, the overall sales were 1,711,711 units in February, compared to 1,668,268 units a year ago. Dealers attribute this to a focus on liquidation of existing stock, discounts and better rural sales. After January 2019, except in October 2019, retail numbers were in the red. October’s numbers were better as it was a festival month.

According to FADA President Ashish Harsharaj Kale, customers are asking for unreasonable discount, which is impacting PV sales.

Availability of credit is also a factor. He said many were holding back on purchase decision, expecting sweeter deals towards the end of March. Another factor is the coronavirus scare. It is leading to an alarming drop in customer visits to showrooms. The share market is also contributing to the weakened purchase sentiment.