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
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.