Dis­counts Drive Dec Car Sales, Cos See Bet­ter Days Ahead

Whole­sale vol­umes fell in De­cem­ber, but SIAM ex­pects bet­ter liq­uid­ity to boost sales this year

The Economic Times - - Brands: Creating Desire - Our Bureau

New Delhi: Deep dis­counts may have helped push up re­tail sales, but whole­sale vol­umes of pas­sen­ger ve­hi­cles de­clined marginally last month as car­mak­ers cor­rected in­ven­tory which had piled up af­ter a lack­lus­tre fes­tive sea­son.

Ac­cord­ing to data re­leased by in­dus­try body So­ci­ety of In­dian Au- to­mo­bile Man­u­fac­tur­ers (SIAM), pas­sen­ger ve­hi­cle sales last month dropped by 0.43% to 2,38,692 units as against 2,39,723 units sold in the year-ago pe­riod.

“The third quar­ter has not been good for the in­dus­try at all. Ev­ery­one stocked up for the fes­tive sea­son, but sales did not hap­pen. Con­sumer sen­ti­ments were not good due to high fuel prices, non-avail­abil­ity of credit. Across seg­ments, ad­just­ments had to be made in whole­sale dis­patches there­after to ra­tio­nalise in­ven­tory,” said SIAM pres­i­dent Ra­jan Wad­hera.

This is the fifth time this fi­nan­cial year that pas­sen­ger ve­hi­cle sales have de­clined.

Wad­hera said that dis­counts of­fered by man­u­fac­tur­ers last month helped push re­tail sales. Pas­sen­ger ve­hi­cle stocks now stand at the nor­mal level of 30-35 days, com­pared with the ear­lier level of 40-45 days. The in­dus­try body is hope­ful that with fuel prices com­ing down and liq­uid­ity im­prov­ing in the mar­ket in the past few weeks, con­sumer sen­ti­ment will pick up go­ing ahead.

“The fourth quar­ter should be bet­ter. But it is un­likely that we will meet the ini­tial growth tar­get of 7-8% fore­cast for the (pas­sen­ger ve­hi­cle) seg­ment. This year should be one of growth as pre-buy­ing hap­pens ahead of the switchover to up­graded emis­sion norms,” ex­plained Wad­hera. Pas­sen­ger ve­hi­cle sales have grown by 4.37% to 25,33,221 units be­tween April and De­cem­ber 2018.

In the com­mer­cial ve­hi­cle seg­ment too, a liq­uid­ity crunch and a change in axle load­ing norms im­pacted whole­sale vol­umes. Sales of com­mer­cial ve­hi­cles in the month

un­der re­view de­clined 7.80% to 75,984 units.

“There has been good growth in the tip­per seg­ment, which shows that con­struc­tion ac­tiv­ity is in full swing. How­ever, sales of haulage trucks and trac­tor-trail­ers have been hit be­cause of the change in axle load­ing norms, which al­low op­er­a­tors to load more,” said Wad­hera.

Two-wheeler sales too fell 2.23% to12,59,026 units in De­cem­ber. While sales of scoot­ers dropped by 6.08% to 4,06,137 units last month, those of mo­tor­cy­cles re­mained flat at 7,93,061 units. Over­all, ve­hi­cle sales across cat­e­gories de­creased by 2.97% to 16,17,356 units.

For the en­tire cal­en­dar year, pas­sen­ger ve­hi­cle sales rose 5% to 33,94,757 units. Com­mer­cial ve­hi­cle sales went up by 27% to 10,05,380 units. Two-wheeler sales in­creased by 12.84% to 2,16,45,169 units. To­tal ve­hi­cle sales last year grew by 12.70% to 2,67,63,767 units.

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